HM Treasury has today introduced the long-awaited Insurance Bill to reform commercial contracts, and better equip UK firms to compete against their international peers.
The release of the Bill marks the latest stage in eight years of consultation with businesses and insurers, and is the product of recommendations from the Law Commission and the Scottish Law Commission.
It will introduce a duty of "fair representation" on commercial policyholders, abolishes "basis on contract clauses" for commercial cover, and providers insurers with remedies against fraudulent claims.
Newly appointed economic secretary to the Treasury, Andrea Leadsom said: "We want the industry to continue to grow and provide better services to customers, which is why we need to bring insurance contract law into the 21st century.
"The Insurance Bill that the government is introducing today will ensure that Britain's insurers can succeed in the future, while business customers can take advantage of lower costs."
Aviva UK and Ireland general insurance chief executive Maurice Tulloch described the bill as a "welcome development".
Tulloch added: "At Aviva, we've been pushing for some time for contracts to be easier to understand and provide greater clarity for customers. Underpinning this is reform of insurance law to make it more relevant for today's businesses."
John Hurrell, CEO of UK risk management trade body Airmic, said the Bill would address serious shortcomings in the legal framework.
"The new legislation provides much needed clarity, which will be good for business and will help to maintain confidence in the London insurance market," he said.
The Bill is the first attempt to reform commercial insurance law since the Marine Insurance Act 1906, which has been held to apply to all insurance.
It will benefit from special parliamentary produce for Law Commission Bills with cross-party support, allowing it to gain accelerated progress through Parliament.
