FERMA publishes guide to Insurance Act 2015
The Federation of European Risk Management Associations (FERMA) has published a guide for risk managers across Europe on the implications of new legislation that will change the legal framework for commercial insurance in the UK.
The guide, Changes in UK Insurance Law - An Introduction for European Businesses, has been produced by FERMA jointly with insurance governance specialists Mactavish. It warns that the UK's Insurance Act 2015 will affect buyers across Europe, because of the large amount of international insurance and reinsurance business placed in the London insurance market.
FERMA president Julia Graham said: "The Act will bring significant additional direct and indirect benefits to businesses that arrange insurance in the UK. However, to get these benefits, European risk managers will need to understand the substance of the reform and adapt their practices in response."
The law, which comes into force next year, is the most important new law affecting commercial insurance in the UK for more than a century, FERMA said. It provides buyers with valuable extra protection, meaning that insurers will no longer be able to use technicalities or trivial breaches of contract to turn down claims on policies purchased in good faith.
It also places an enhanced burden on buyers to present underwriters with accurate information that provides a fair and detailed picture of their organisations' risk profile.
The guide provides an overview of the legislation and its implications for risk managers, as well as a check-list of things for them to consider.
David Hertzell, former law commissioner and now Mactavish employee, says the Act will encourage greater professionalism in the market.
Bruce Hepburn, chief executive officer of Mactavish, added: "By compelling businesses to understand their risk in more detail and shifting insurers' focus towards clarifying and defining coverage, the Act is expected to drive increased innovation in bespoke coverage design. To benefit, however, buyers and their brokers will have to be alert to the implications of the new law. This guide has been written to help them do so."
