The Enterprise Bill received Royal Assent on 4 May 2016, thereby becoming an Act of Parliament – the Enterprise Act 2016 (“the Act”).
The Act, which amends the Insurance Act 2015 (due to come into force on 12 August 2016), will bring about an important change for policyholders by introducing an implied term that will place insurers under a duty to pay valid claims within a reasonable time, and by allowing policyholders to claim damages in the event that they have suffered financial loss because of the late payment of an insurance claim. What is reasonable will, of course, depend upon the type of insurance, the size and complexity of the claim, compliance with any relevant statutory or regulatory rules or guidance and other factors outside the insurer’s control. Roger Franklin, Partner within the Insurance Litigation Department, discussed the scope and impact of the changes in greater detail earlier this year, please see briefing document here>>
The changes in respect of insurance law will come into force on 4 May 2017 and will apply only to insurance contracts (and variations to the same) that are entered into on or after that date, thereby providing for a transitional period of one year for insurers to review their internal process and, in particular, consider the way in which they handle claims.
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