Lack of data hinders good debate on disclosure rules
The duty to disclose requires that applicants provide insurers with any information that could affect the insurer’s decision to insure them. This duty reaches beyond the questions asked in the form – so even if an insurer fails to ask a question, the consumer is required by law to provide the information.
Almost no consumer fully appreciates the extent of this requirement or the effect it might have on potential claims.
Some commentators, such as Karen Stevens, Insurance & Financial Services Ombudsman, say that ‘Updating our insurance law on unintentional “non-disclosure” would help prevent consumers finding themselves uninsured or uninsurable in future’.
Rebecca Sellers from Melior Law covered legal issues relating to disclosure, at a recent event run by Fidelity Life. Sellers pointed out that the law does not distinguish between ‘intentional or unintentional’ and that most consumers would assume that simply answering the questions on the form honestly would be sufficient to fulfill their duty of disclosure. Yet that is not the case, and claims could be declined for failing to disclose relevant information.
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