UK: Insurance Law Updated To Reflect New Risks From Terrorism (Pinsent Masons Insurance Briefing: 5 February 2019)

Last Updated: 7 February 2019
Article by Nicholas Bradley, Alexis Roberts and Colin Read

Latest fortnightly round-up of insurance, legal and business developments with analysis and commentary from the insurance team at Pinsent Masons.

The main topics we're focusing on this week are:

Insurance law updated to reflect new risks from terrorism

ANALYSIS (Nick Bradley): The changing nature and scale of terrorist attacks has prompted a speedy and welcome response from the UK government and insurance industry, with a series of steps to address the impact such attacks can have on businesses. Changes have included the mutualisation of new risks by a trade body; the extension of cover through new legislation, and a reinsurance scheme's response to developments in the open market. The Counter Terrorism and Border Security Bill recently passed through its third reading in the UK parliament, but is still awaiting royal assent. The Bill has been criticised by the Law Society and human rights groups amongst others in relation to the new police powers that the legislation will provide, including in relation to detention and interview of people suspected of carrying out terrorism offences. For insurers and businesses, section 20 of the Bill is relevant. That section would amend the Reinsurance (Acts of Terrorism) Act 1993 so that Pool Re can extend its business interruption cover to include losses that are not contingent on physical damage to property. Read more...

Insurers face new reporting duties on value measures data

Insurers in the UK are to be required to publish more data about the value and quality of the products they sell in a move designed to reduce the sale of unsuitable products to consumers. The proposals, which the FCA has opened to consultation until 30 April, builds on findings from the regulator's 2014 market study on general insurance (GI) add-ons where it found that too many consumers were purchasing poor value, unnecessary products. The FCA subsequently consulted on three potential methods for calculating the relative value of these products, in order to encourage competition between firms. Insurance law expert Jonathan Cavill of Pinsent Masons said: "The FCA's consultation on the submission of value measures has been a long time coming, since its discussion paper in 2015. The FCA has for some time attempted to define a suitable metric for the value of an insurance product and struggled to do so. The original value metric of a 'claims ratio' has been rejected because firms have differing practices; it involves the sharing of commercially sensitive data, and it does not assess the quality of the product and cannot capture non-claim value in a product. The FCA also rejected 'peace of mind', 'customer service' and 'DEFAQTO' ratings." Read more...

Insurers seek clarity on coverage for GDPR fines

Insurers have called for clarity from global policymakers about the extent to which they can provide coverage for regulatory fines and penalties, such as those issued for breaches of the EU's General Data Protection Regulation (GDPR). The Global Federation of Insurance Associations (GFIA) has written to the Organisation for Economic Cooperation and Development (OECD) to offer its "proactive and meaningful participation" in the OECD's new cyber insurance project, which is being led by the organisation's Insurance and Private Pensions Committee (IPPC). "The insurability of fines and penalties has remained a grey area for some time," said insurance litigation expert Chamika Hand of Pinsent Masons "Whilst some regulatory bodies, such as the FCA, have made clear that their penalties cannot be covered by insurance, this is not the case for the ICO. This has led to insurers being forced to deal with this issue on a case by case basis, which is unsatisfactory for both the insured and the insurer. Any assistance that can be provided by policymakers on this issue will greatly assist the market in being able to assess risk and set premiums at appropriate levels." Read more...

Financial ombudsman reveals huge rise in caseload

The Financial Ombudsman Service (FOS) has experienced a significant rise in the number of cases it is handling, its chief executive has told a House of Commons committee. Giving evidence to the Treasury Select Committee for its inquiry into the FOS last week, chief executive Caroline Wayman said consumers were waiting longer for decisions on cases referred to the service than before it was overhauled in 2016. Regulatory compliance expert Tom McDonnell of Pinsent Masons said the number of cases being handled by the FOS was likely to continue rising. "Consumer awareness of the FOS has been raised significantly in recent years through a number of high-profile issues and upcoming changes to the FOS are only going to increase its remit and its workload. An update on the FOS award limit consultation is expected in early spring, but if it is approved we consider it is inevitable that this will serve to boost FOS complaint numbers." Read more...

Global ransomware attack could leave $166bn 'insurance gap'

Businesses around the world could be exposed to losses totalling $166 billion in the event of a major ransomware attack, and the cost to insurers of paying out on claims covered by cyber insurance policies could exceed what the total value of the premiums they collect from those policyholders, according to a new report. "Unless properly protected and segregated, back-up systems are susceptible to ransomware attacks, leading to increased, and avoidable, business interruption losses," cyber risk expert Seaton Gordon of Pinsent Masons said. "Ransomware presents particular risks to legacy supervisory control and data acquisition (SCADA) systems in the industrial sector, and to 'patchwork' IT systems that are made up of many different pieces of software, particularly common following a merger of two companies, which may not mesh seamlessly." Read more...

FCA proposes exempting legal heads from senior managers regime

The FCA has proposed to exempt heads of legal at regulated firms from the requirement to be approved as a senior manager under the Senior Managers and Certification Regime (SMCR) in response to concerns that doing so would conflict with legal privilege rules. The announcement is one of several proposed amendments and enhancements to the SMCR set out in a new FCA consultation paper. The FCA is seeking views on its proposed changes by 23 April 2019. Financial regulation expert David Heffron of Pinsent Masons said that the proposal would be welcomed by firms' general counsel and heads of legal. "Many in-house lawyers were concerned that as senior managers, to avoid personal liability for regulatory issues arising within the legal team, they would have to disclose legally privileged advice to regulators," he said. "This would have created a conflict between their obligations to the FCA and the Prudential Regulation Authority (PRA), and their professional obligations as solicitors." Read more...

Insurance briefing is a round-up of legal and business developments published on Out-Law.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions