Search Legislation

Enterprise Act 2016

Status:

This is the original version (as it was originally enacted).

PART 5Late payment of insurance claims

28Insurance contracts: implied term about payment of claims

(1)After section 13 of the Insurance Act 2015 (remedies for fraudulent claims: group insurance) insert—

PART 4ALate payment of claims

13AImplied term about payment of claims

(1)It is an implied term of every contract of insurance that if the insured makes a claim under the contract, the insurer must pay any sums due in respect of the claim within a reasonable time.

(2)A reasonable time includes a reasonable time to investigate and assess the claim.

(3)What is reasonable will depend on all the relevant circumstances, but the following are examples of things which may need to be taken into account—

(a)the type of insurance,

(b)the size and complexity of the claim,

(c)compliance with any relevant statutory or regulatory rules or guidance,

(d)factors outside the insurer’s control.

(4)If the insurer shows that there were reasonable grounds for disputing the claim (whether as to the amount of any sum payable, or as to whether anything at all is payable)—

(a)the insurer does not breach the term implied by subsection (1) merely by failing to pay the claim (or the affected part of it) while the dispute is continuing, but

(b)the conduct of the insurer in handling the claim may be a relevant factor in deciding whether that term was breached and, if so, when.

(5)Remedies (for example, damages) available for breach of the term implied by subsection (1) are in addition to and distinct from—

(a)any right to enforce payment of the sums due, and

(b)any right to interest on those sums (whether under the contract, under another enactment, at the court’s discretion or otherwise).

(2)In section 22 of that Act (application etc of Parts 2 to 5), after subsection (3) insert—

(3A)Part 4A applies only in relation to contracts of insurance entered into after that Part has come into force, and variations to such contracts.

29Contracting out of the implied term about payment of claims

(1)After section 16 of the Insurance Act 2015 (contracting out: non-consumer contracts) insert—

16AContracting out of the implied term about payment of claims: consumer and non-consumer insurance contracts

(1)A term of a consumer insurance contract, or of any other contract, which would put the consumer in a worse position as respects any of the matters provided for in section 13A than the consumer would be in by virtue of the provisions of that section (so far as relating to consumer insurance contracts) is to that extent of no effect.

(2)A term of a non-consumer insurance contract, or of any other contract, which would put the insured in a worse position as respects deliberate or reckless breaches of the term implied by section 13A than the insured would be in by virtue of that section is to that extent of no effect.

(3)For the purposes of subsection (2) a breach is deliberate or reckless if the insurer—

(a)knew that it was in breach, or

(b)did not care whether or not it was in breach.

(4)A term of a non-consumer insurance contract, or of any other contract, which would put the insured in a worse position as respects any of the other matters provided for in section 13A than the insured would be in by virtue of the provisions of that section (so far as relating to non-consumer insurance contracts) is to that extent of no effect, unless the requirements of section 17 have been satisfied in relation to the term.

(5)In this section references to a contract include a variation.

(6)This section does not apply in relation to a contract for the settlement of a claim arising under an insurance contract.

(2)In section 17(1) of that Act (the transparency requirements), after “16(2)” insert “or 16A(4)”.

30Additional time limit for actions for damages for late payment of insurance claims

After section 5 of the Limitation Act 1980 insert—

5AAdditional time limit for actions for damages for late payment of insurance claims

(1)An action in respect of breach of the term implied into a contract of insurance by section 13A of the Insurance Act 2015 (late payment of claims) may not be brought after the expiration of one year from the date on which the insurer has paid all the sums referred to in subsection (1) of that section.

(2)Any payment which extinguishes an insurer’s liability to pay a sum referred to in section 13A of the Insurance Act 2015 is to be treated for the purposes of this section as payment of that sum.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Show Explanatory Notes for Sections: Displays relevant parts of the explanatory notes interweaved within the legislation content.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources