The Law Commission is considering introducing a ‘non-contestability' period into life insurance policies, which would make insurers prove non-disclosure within a set period of time.
In its latest issues paper, the Commission suggests insurers should only be allowed to turn down a claim on the grounds of non-fraudulent non-disclosure if they prove the non-disclosure within three years of the policy being taken out. The proposal was first raised by the Association of British Insurers’ (ABI) protection committee, which claimed introducing a non-contestability period could help re-build trust between consumers and insurers. A similar system operates in the US, where insurers can only turn down a claim on grounds of non-disclosure if they prove it within the first two y...
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