Is a five year period right for negligent life claims?

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At first glance the Law Commission's proposal that negligent life insurance claims should be paid after five years seems like a positive move. After all, a negligent mistake is described as an inadvertent mistake, and we all make mistakes.

But is the five-year non-contestability period supported by the industry? And who is going to foot the bill with the added expense of more paid claims? The Law Commission categorises three different type of misrepresentations: deliberate or reckless, reasonable (innocent) and negligent (inadvertent). In its consultation paper released on 17 July, the Commission says “insurers may not refuse claims on the basis of negligent statements after a set period” which it proposes to be five years. FSA rules state insurers are not permitted to refuse a misrepresentation claim which was neither ...

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