PART 5

Late payment of insurance claims

Insurance contracts: implied term about payment of claims
28
1
After section 13 of the Insurance Act 2015 (remedies for fraudulent claims: group insurance) insert—
PART 4A

Late payment of claims

Implied term about payment of claims
13A
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.