ICOBS 8.1 Insurers: general

1An insurer must:

1. (1)

   handle claims promptly and fairly;

2. (2)

   provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress;

3. (3)

   not unreasonably reject a claim (including by terminating or avoiding a policy); and

4. (4)

   settle claims promptly once settlement terms are agreed.

A rejection of a consumer policyholder's claim is unreasonable, except where there is evidence of fraud, if it is :2

1. (1)

   in relation to contracts entered into or variations agreed on or before 5 April 2013, for:2

   1. (a)

      non-disclosure of a fact material to the risk which the policyholder could not reasonably be expected to have disclosed; or2

   2. (b)

      non-negligent misrepresentation of a fact material to the risk; or2

2. (2)

   in relation to contracts entered into or variations agreed on or after 6 April 2013, for misrepresentation by a customer and the misrepresentation is not a qualifying misrepresentation; or2

3. (3)

   for2 breach of warranty or condition unless the circumstances of the claim are connected to the breach and unless (for a pure protection contract):

   1. (a)

      under a ‘life of another’ contract, the warranty relates to a statement of fact concerning the life to be assured and, if the statement had been made by the life to be assured under an ‘own life’ contract, the insurer could have rejected the claim under this rule; or

   2. (b)

      the warranty is material to the risk and was drawn to the customer's attention before the conclusion of the contract.

2For the purposes of ICOBS 8.1.2R (2) a “qualifying misrepresentation” is one made by a consumer before a consumer insurance contract was entered into or varied if:

1. (1)

   the consumer made the misrepresentation in breach of the duty set out in section 2(2) of the Consumer Insurance (Disclosure and Representations) Act 2012 to take reasonable care not to make a misrepresentation to the insurer; and

2. (2)

   the insurer shows that without the misrepresentation, that insurer would not have entered into the contract (or agreed to the variation) at all, or would have done so only on different terms.

[Note: section 4 of the Consumer Insurance (Disclosure and Representations) Act 2012.]