Consumer insurance law requires immediate reform, according to consumer groups, lawyers, brokers and most insurance firms responding to a consultation by the English and Scottish Law Commissions.

In the responses published this week, the Law Commissions' provisional proposals for change received widespread support.

However, the Commissions, which exist to recommend law reform when it is needed, stressed that they have not yet formulated their final recommendations on consumer insurance law reform.

The consultation received more than 100 responses, which covered a range of issues including pre-contract disclosure of information, warranties and the role of the broker in both consumer and business insurance. Under the proposals, consumers should no longer be under any obligation to volunteer information to insurers when applying for insurance. They would only be required to answer honestly and with reasonable care any questions asked.

It also proposed that instead of being entitled to avoid the contract altogether for an inaccurate or misleading statement, as under the current law, insurers would have a range of remedies depending on the degree of fault.
The proposals also aimed to bring the law more into line with current industry practice by severely restricting the occasions when insurers can avoid liability by relying on a consumer's breach of a warranty.