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The 2010 Act received royal assent on the 25 March 2010 and aims to address some of the problems under the old 1930 Act. The Government is currently working to identify what needs to be done to bring the 2010 Act into force and will make an announcement shortly as to when it will commence. Until the 2010 Act is brought in to force insurers should continue to deal with claims under the old 1930 Act.
The main changes under the 2010 Act are:
Other matters which are relevant under the 2010 Act are:
In summary, the 2010 Act will make it less costly for claimants to bring claims against the liability insurer of an insolvent or deceased insured. The 2010 Act also limits policy indemnity defences available to the liability insurer.
From a practical point of view liability insurers need to be more careful and selective as to the reasons policy indemnity is declined when issuing a final decision and should not assume that claims have simply gone away.
There is a strong possibility that claimants may be holding back on claims where the insured is insolvent or deceased until the 2010 Act comes into force. Therefore consideration should be given now to issuing a final decision on these claims which provide a defence under the 2010 Act and/or completing outstanding indemnity/liability enquiries.
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