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

4.26 The second approach would be to permit general questions but for the court to
ask whether a reasonable consumer would understand that this question was
asking about this particular information. This is the French approach. Article L
112-3 para 2 effectively codifies the position reached through case law. 24 It
provides that if an insurer asks a question expressed in “general terms”, it cannot
complain when it receives a vague response. 25 Its effect is to discourage insurers
from asking vague, open-ended questions as it could leave them without
recourse when a misrepresentation is made.
4.27 The FOS also appears to take the second approach. As we have seen, it requires
insurers to ask clear questions, but it does not judge the clarity of the question in
isolation. Ombudsmen ask whether a reasonable proposer should have realised
that the question was asking about the particular information at issue.
4.28 If we take the health question above, most consumers would realise that they
should mention a recent diagnosis of cancer but it is unclear whether they are
expected to mention an operation for an in-growing toenail 5 years ago. The first
approach would ask whether the insurer should have made its health questions
specific. If so, the general question would be struck out altogether, with the result
that consumers would no longer be required to mention any health issues
(including the cancer). The second would absolve a consumer of the requirement
to mention the toenail (on the grounds that the insurer did not make this
sufficiently clear) but would still require the cancer to be declared.
4.29 Striking out unduly wide questions would concentrate insurers’ minds on the need
to ask for information in a clear, sensible way, but it could lead to surprising
decisions in some circumstances. The second approach would do justice in the
individual case.
4.30 On balance, we propose the second approach. In response to a general
question, the proposer would be required to provide such information as a
reasonable person in the circumstances would provide, bearing in mind the way
the question was presented, the nature and extent of the insurance cover and the
circumstances in which it was sought. This is an objective test, which we discuss
more fully below. It gives an insurer an incentive to make its questions clear: the
wider and vaguer the question, the more it would be reasonable for the
policyholder to fail to mention something.
Provisional proposals: the duty of disclosure
4.31 We provisionally propose that there should be no duty on the consumer
proposer to disclose matters about which no questions were asked.
24 Lambert-Faivre, Droit des Assurances (11 th edition), p 245 at para 316.
25 Lorsque, avant la conclusion du contrat, l'assureur a posé des questions par écrit à
l'assuré … il ne peut se prévaloir du fait qu'une question exprimée en termes généraux n'a
reçu qu'une réponse imprécise. [When, before the conclusion of the contract, the insurer
has asked the insured written questions it cannot take advantage of the fact that a question
expressed in general terms has only received a vague answer.]
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