Marsh’s latest paper, The Enterprise Act 2016 Comes Into Force – New Right for Policyholders to Claim Damages for Late Payment of Insurance Claims, examines the impact of the new legislation on policyholders and the insurance industry. It explores:
• The impact of the new legislation on any (re)insurance policy placed or renewed on or after 4 May 2017, if it is subject to the laws of England and Wales, Scotland, or Northern Ireland.
• The provision which enables insurers on non-consumer policies to contract out of the new Act, provided insurers meet the “transparency requirements” of the Insurance Act 2015.
• The time limit for policyholders to make claims against insurers for breach of the Act.
• Whether the Enterprise Act 2016 is likely to lead to a high volume of successful claims against insurers for late payment damages.
Ian Martin, Head of Claims, Client Advisory Services, Marsh, said: “The Enterprise Act is certainly a useful weapon in the policyholders’ armoury, and gives them an additional negotiating point with insurers. In some circumstances, damages for late payment of claims may offer an important remedy for policyholders and provide an incentive for insurers to process and pay claims promptly.
“While the Act is a positive step forward for policyholders and should encourage insurers to increase the efficiency of their claims handling processes, it does not give policyholders carte blanche to claim or recover damages from insurers in all cases. Some claims – particularly complex ones – can often justifiably take considerable time to investigate. We do not see it as opening the gates to a flood of successful litigation against insurers.”
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