InView Autumn/Winter 2015

24 InView | An independent eye on insurance
MARKET
WATCH
Businesses are constantly seeking new and innovative
ways of maintaining a competitive advantage.
One way to stay ahead of the field is to monitor the horizon for
legislative change and either insulate against any negative effect,
or maximise any benefits. Weightmans’ Market Affairs Group not
only monitors the horizon, but actively engages the market to
effect change. We take a look at upcoming issues.
2. EU GENERAL DATA PROTECTION REGULATION
(“THE REGULATION”)
The Regulation is expected to be enacted later this year
coming into force during 2017. It will be directly effective
in all EU member states.
Commercial organisations such as insurers and brokers
handle significant amounts of personal and often sensitive
data, therefore, the impact of this new Regulation cannot be
understated. The Regulation will:
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create a pan-European data protection authority
require mandatory notification of data breaches
increase the limit of fines for a breach to 5% of the offenders
global annual turnover; and
apply to all organisations conducting business in Europe,
regardless of whether they are domiciled within the EU.
The Regulation also underpins principles such as the “right to
be forgotten” and organisations need to look to their processes
and systems to ensure they can comply with the new rules.
1. THE INSURANCE ACT 2015 (“THE ACT”)
The main provisions of the Act come into force on 12 August
2016. It changes the duty of utmost good faith to a duty of fair
presentation, abolishes “basis of contract” clauses, amends
the law on warranties and codifies the law on insurance
contract fraud. The Act also makes amendments to the Third
Parties (Rights Against Insurers) which will allow it to be
brought into force.
The Insurance Act will mean significant change for insurers
who are well advised to start their change projects now.
3. TACKLING THE COMPENSATION CULTURE
Insurers, led by the Association of British Insurers have tabled
their latest proposals to tackle adverse behaviours in the
personal injury market. Noise induced hearing loss (“NIHL”)
claims have increased significantly over the last three years.
In response, insurers are calling for fixed costs in NIHL cases,
the introduction of a pre-action protocol, and the creation of a
claims portal capable of running multi-defendant actions.
Insurers are also lobbying for an increase in the small claims
track limit, as well as a change to the law so that some injured
parties receive care in lieu of compensation.
4. CLAIMS MANAGEMENT REGULATION
The government has voiced its intention to review claims
management regulation and whether this would be better as
part of the remit of the Financial Conduct Authority as opposed
to a government department. The government is expected to
consult on this shortly.
© Copyright. Weightmans 2015. All rights reserved.