Misrepresentation, Non-Disclosure and Breach ... - Law Commission

12.77 If there are reasons to preserve an extended duty under section 19(a):
(1) Should the remedy lie in damages against the intermediary, rather than
in avoidance against the insured?
(2) Should any information given in confidence by a third party be excepted
from the scope of the duty?
(3) Should the duty be curtailed to information received in the course of the
relevant transaction? (10.52)
PRE-CONTRACT INFORMATION AND INTERMEDIARIES: BUSINESS
INSURANCE PROPOSALS
12.78 We provisionally propose that, in a business context, an intermediary should be
regarded as acting for an insurer for the purposes of obtaining pre-contract
information, if it deals with only a limited number of insurers and does not search
the market on the insured’s behalf. (10.59)
12.79 For businesses using other intermediaries, the issue of whom the intermediary is
acting for in respect of disclosure issues should be left to the common law.
(10.60)
12.80 We provisionally propose that in the business context, an intermediary who would
normally be regarded as acting for the insurer in obtaining pre-contract
information remains the insurer’s agent while completing a proposal form. (10.62)
12.81 We provisionally propose that a business insured’s signature on a proposal form
that has been completed incorrectly by a third person should not be regarded as
conclusive evidence that the insured knew of or adopted what was written on the
form. However, this should not reduce the effect of a warranty of fact given by a
business insured. (10.64)
12.82 We provisionally propose that where a broker breaches section 19(a), the insurer
should no longer be entitled to avoid the policy against the insured. Instead a
remedy in damages should lie against the broker. (10.73)
12.83 We ask whether:
(1) The right to damages should apply whenever insurance contracts are
placed within the UK, or only where the contract is subject to the law of a
part of the UK?
(2) Producing brokers should be obliged to pass relevant information up the
chain to the placing broker?
(3) The law should specifically state that an intermediary is not required to
disclose information given to it in confidence by a third party? (10.74)
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