During a short debate on Monday 2 November, the House of Lords discussed (in Grand Committee) the clauses in the Bill that would introduce the remedy of damages for late payment of insurance claims. The Minister, Baroness Neville-Rolfe, noted that these provisions in the Bill would “rectify a gap in the legal regime and encourage responsible payment, for the benefit of policyholders and the perception of the market. These arguments apply for all insurance contracts, including reinsurance, which are treated by the law in the same way as all other non-consumer insurance contracts.”
The Enterprise Bill 2015/16 was debated at second reading in the Lords on 12 October. Provisions in the Bill (discussed here by my colleague David Hertzell) will introduce a new remedy against insurers: damages for failure to pay policyholders’ valid claims within a reasonable time. This remedy had been recommended by the Law Commission in its review of insurance contract law, but was not taken forward in the Insurance Act 2015 due to some controversy surrounding it. The recent speeches in the Lords suggest that the arguments could yet be further developed as the Enterprise Bill proceeds.