17th Jul 2014 14:12
LONDON (Alliance News) - The UK Government has moved to update the 100 year-old rules governing contracts between businesses and insurers, in a step designed to introduce a more modern legal regime that will increase transparency and reduce the number of legal disputes over time.
According to a HM Treasury statement, the UK government Thursday introduced the Insurance Bill to Parliament as it looks to help insurers compete against their global competitors. It expects businesses to benefit by about GBP100.0 million over the next 10 years as a result of factors such as lower litigation and transaction costs.
Economic Secretary to the Treasury Andrea Leadsom said that Britain's insurance industry, which employs more than 300,000 people across the country, stands to benefit from the bill.
"We want the industry to continue to grow and provide better services to customers, which is why we need to bring insurance contract law into the 21st century," Leadsom said in a statement.
"The Insurance Bill that the government is introducing today will ensure that Britain?s insurers can succeed in the future, while business customers can take advantage of lower costs," Leadsom added.
Maurice Tulloch, Chief Executive of Aviva UK & Ireland GI, said that the insurer has been pushing for reform for some time, adding that it will provide greater clarity for customers.
"The bill is a very welcome development which will deliver significant benefits to both customers and the industry, helping make the UK a great place to do business," Tulloch said in a statement.
The Chief Executive of Airmic, the UK's risk management trade body echoed Tulloch's sentiment.
"The UK is unique amongst advanced economies in that our current legal framework potentially penalises the purchaser of commercial insurance and creates uncertainty over whether policies bought in good faith will pay out in the event of a claim," John Hurrell said in a statement.
The bill comes after eight years of consultation with businesses and insurers.
By Samuel Agini; [email protected]; @samuelagini
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