The Marine Insurance Act (MIA) 1906, the codification of the law pertaining to placement of commercial insurance contracts is more than 100 years old. The new Act seeks to provide further protection to both consumer and non-consumer buyers of insurance and is coming into force on the 12th of August 2016. The provisions of the new Act will be applicable to policies renewing or placed after that date. Fortunately, the market has been preparing ahead of this transition for at least the past two years.
The Insurance Act has encompassed reforms in areas of Law such as the duty of fair presentation of the risk, policy disclosure and remedies for non-disclosure, warranties and conditions as well as remedies on fraudulent claims. The new Act also brings more transparency requirements in respect of introducing in cover disadvantageous to the assured terms, as well as requirements for contracting out. Underwriters are likely to face a number of challenges in adopting the new law and will need to make careful preparations as the Act will drive practical changes in the way that business is placed in the Marine Insurance Industry. Some of them have elected to contract out of certain aspects of the new Act, as for instance all UK domiciled P&I Clubs have already contracted out certain aspects of the new Act (such as the Duty of Fair presentation of the risk, warranties etc). Generally speaking the Act has been welcomed by many market players as it incorporates relevant insurance case Law and is perceived to be remedying many imbalances of Law in favor of insurers. However, time will tell whether this first impression was right or wrong. For a more full and detailed explanation of the changes brought by the Act, please visit the following link: