§ Mr. Brightasked the Secretary of State for Trade and Industry what progress he has made in his review of the position on non-disclosure and breach of warranty in relation to insurance contracts.
§ Mr. ChannonThe insurers have informed me that they are willing to strengthen the non-life and long-term statements of insurance practice on certain aspects proposed by the Department. These concern the limitation of the duty of disclosure, warranties, disputes procedures and, in the case of the long-term statements the payment of interest on life insurance claims. The statements apply to insurances taken out by private consumers. Copies of the texts of the revised statements have been placed in the Library.
These changes are in the right direction. I am well aware of the arguments, advanced amongst others by the 357W representatives of consumers, in favour of legislation on non-disclosure and breach of warranty. But I consider that on balance the case for legislation is out-weighed by the advantages of self-regulation so long as this is effective. I look to all insurers, whether or not they belong to the Association of British Insurers which has promulgated the statements, to observe both their spirit and their letter.
In the light of the insurers' undertakings I do no consider there is any need for the moment to proceed with earlier proposals for a change in the law. My Department will however keep the situation under review in order to ensure that self-regulation is working adequately and will reconsider the question of legislation if problems continue to arise.