Clause 1 - Main definitions

Consumer Insurance (Disclosure and Representations) Bill [Lords] – in a Public Bill Committee am 2:00 pm ar 22 Chwefror 2012.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

It would useful if the Minister explained the origin of the Bill, particularly for those members of the Committee who might not have been party to the rather byzantine Second Reading Committee arrangement. I do not wish him to repeat at length the rationale for the Bill, but clause 1 includes some important definitions about consumers of insurance products. Most of our constituents will be consumers of insurance products, whether motor insurance, flood risk insurance, household insurance, contents insurance and so on. So clause 1 is as a good a place as anywhere to get a sense of the strategic overview of the Bill.

I welcome the Bill. It is an important piece of legislation. The 2009 Law Commission report, produced jointly with the Scottish Law Commission—it was obviously commissioned by the previous Administration—recommended this set of changes. It represents a small, but significant, change in the archaic nature of insurance law, which has hitherto been in an unwritten form. The Bill, as far as I can see, updates those provisions and ensures that a new burden is placed on the party giving insurance cover, the insurer, to ask more specific questions of the consumer when requiring the disclosure of relevant information, rather than the former caveat that the onus is on the insured party to disclose everything that might be relevant. If the insured party accidentally forgot to disclose even a small item, they potentially risked their insurance cover being invalid. The Bill is a generally welcome step forward, but I would be grateful if the Minister confirmed whether I am correct.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

I do not think there is very much to add to what the hon. Gentleman has said, save that the Bill is supported by Age UK, the British Heart Foundation, Consumer Focus, Macmillan Cancer Support, the Multiple Sclerosis Society, the Trading Standards Institute, the university of Manchester, Which? and UNLOCK, which demonstrates the wide support commanded by the Bill. There has been a lengthy consultation process with the industry and consumer groups.

The Bill stems from the excellent work undertaken by the Law Commission, and I would like to place on record my thanks for the work it has done to promote those measures. The Bill is important for strengthening consumer protection and it reflects best practice in the industry. The definitions set out in clause 1, to which the hon. Gentleman referred, are drafted with the support of the industry and the Financial Services Authority.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.