What duty was introduced by the Consumer Insurance [Disclosure and Representations] Act 2012?

The Consumer Insurance (Disclosure and Representations) Act 2012 introduced the duty for proposers to take reasonable care not to misrepresent the facts when applying for insurance. This means that when individuals seek to purchase insurance, they are required to provide information that is accurate and truthful to the best of their knowledge and belief.

This duty aims to strike a balance between the insurer's need for accurate information to assess risk and the consumer's ability to engage with the insurance process without being burdened by overly stringent disclosure requirements that were prevalent under previous legislation. It recognizes that consumers may not have the same level of knowledge or understanding of insurance as insurers, hence focusing on reasonable care rather than demanding absolute accuracy.

This approach was a significant shift from the previous absolute duty to disclose that required proposers to disclose every material fact, even if not specifically requested. By introducing a standard of "reasonable care," the Act acknowledges human error and the complexities involved in determining what constitutes a misrepresentation.

Those who might believe the other options hold merit might consider them outdated notions. However, the introduction of the reasonable care standard reflects modern practices in consumer law, emphasizing cooperation and transparency rather than punitive measures for unintentional oversight.