(a) involve actual or anticipated dissolution of a body corporate or
an unincorporated body,

(b) involve actual or anticipated insolvency or other financial
difficulties for an individual, a body corporate or an
5unincorporated body, or

(c) are similar to circumstances for the time being described in
sections 4 to 7.

(3) Regulations under this section may make provision about—

(a) the persons to whom, and the extent to which, rights are
10transferred under section 1 in the circumstances added or
removed by the regulations (the “affected circumstances”),

(b) the re-transfer of rights transferred under section 1 where the
affected circumstances change, and

(c) the effect of a transfer of rights under section 1 on the liability of
15the insured in the affected circumstances.

(4) Regulations under this section which add or remove circumstances
involving actual or anticipated dissolution of a body corporate or
unincorporated body may change the cases in which the following
provisions apply so that they include or exclude cases involving that
20type of dissolution or any other type of dissolution of a body—

(a) section 9(3) (cases in which transferred rights are not subject to
a condition requiring the insured to provide information or
assistance to the insurer), and

(b) paragraph 3 of Schedule 1 (notices requiring disclosure).

(5) 25Regulations under this section which add circumstances may provide
that section 1 of this Act applies in cases involving those circumstances
in which either or both of the following occurred in relation to a person
before the day on which the regulations come into force—

(a) the circumstances arose in relation to the person;

(b) 30a liability against which the person was insured under an
insurance contract was incurred.

(6) Regulations under this section which—

(a) add circumstances, and

(b) provide that section 1 of this Act applies in a case involving
35those circumstances in which both of the events mentioned in
subsection (5)(a) and (b) occurred in relation to a person before
the day on which the regulations come into force,

must provide that, in such a case, the person is to be treated for the
purposes of this Act as not having become a relevant person until that
40day or a later day specified in the regulations.

(7) Regulations under this section which remove circumstances may
provide that section 1 of this Act does not apply in cases involving
those circumstances in which one of the events mentioned in subsection
(5)(a) and (b) (but not both) occurred in relation to a person before the
45day on which the regulations come into force.

(8) Regulations under this section may—

(a) include consequential, incidental, supplementary, transitional,
transitory or saving provision,

(b) make different provision for different purposes, and

(c) make provision by reference to an enactment as amended,
extended or applied from time to time,

(and subsections (3) to (7) are without prejudice to the generality of this
subsection).

(9) 5Regulations under this section may amend an enactment, whenever
passed or made, including this Act.

(10) Regulations under this section are to be made by statutory instrument.

(11) Regulations under this section may not be made unless a draft of the
statutory instrument containing the regulations has been laid before,
10and approved by a resolution of, each House of Parliament.”

20 Other amendments

Schedule 2 amends the Third Parties (Rights against Insurers) Act 2010 in
relation to the insured persons to whom the Act applies.

Part 7 15General

21 Provision consequential on Part 2

(1) The provision made by this section is consequential on Part 2 of this Act.

(2) In the Marine Insurance Act 1906, sections 18 (disclosure by assured), 19
(disclosure by agent effecting insurance) and 20 (representations pending
20negotiation of contract) are omitted.

(3) Any rule of law to the same effect as any of those provisions is abolished.

(4) In section 152 of the Road Traffic Act 1988 (exceptions to duty of insurers to
satisfy judgment against persons insured against third-party risks)—

(a) in subsection (2)—

(i) 25in paragraph (a), for “it either under the Consumer Insurance
(Disclosure and Representations) Act 2012 or, if that Act does
not apply,” substitute “the policy under either of the relevant
insurance enactments, or the security”,

(ii) in paragraph (b), for “or security under that Act or” substitute
30“under either of the relevant insurance enactments, or the
security”;

(b) in subsection (3), after “specifying” insert “the relevant insurance
enactment or, in the case of a security,”;

(c) after subsection (4) add—

“(5) 35In this section, “relevant insurance enactment” means the
Consumer Insurance (Disclosure and Representations) Act 2012
or Part 2 of the Insurance Act 2014.”

(5) In Article 98A of the Road Traffic (Northern Ireland) Order 1981 (S.I. 1981/154S.I. 1981/154
(N.I.)) (exceptions to duty of insurers to satisfy judgement against persons
40insured against third party risks)—

(a) in paragraph (2)—

(i) in paragraph (a), for “it either under the Consumer Insurance
Act (Disclosure and Representations) Act 2012 or, if that Act

does not apply,” substitute “the policy under either of the
relevant insurance enactments, or the security”;

(ii) in paragraph (b), for “or security under that Act or” substitute
“under either of the relevant insurance enactments, or the
5security”;

(b) in paragraph (3), after “specifying” insert “the relevant insurance
enactment or, in the case of a security,”;

(c) after paragraph (4) add—

“(5) In this Article, “relevant insurance enactment” means the
10Consumer Insurance (Disclosure and Representations) Act 2012
or Part 2 of the Insurance Act 2014.”

(6) In section 11 of the Consumer Insurance (Disclosure and Representations) Act
2012 (consequential provision), subsections (1) and (2) are omitted.

22 Application etc of Parts 2 to 5

(1) 15Part 2 (and section 21) and section 14 apply only in relation to—

(a) contracts of insurance entered into after the end of the relevant period,
and

(b) variations, agreed after the end of the relevant period, to contracts of
insurance entered into at any time.

(2) 20Parts 3 and 4 of this Act apply only in relation to contracts of insurance entered
into after the end of the relevant period, and variations to such contracts.

(3) In subsections (1) and (2) “the relevant period” means the period of 18 months
beginning with the day on which this Act is passed.

(4) Unless the contrary intention appears, references in Parts 2 to 5 to something
25being done by or in relation to the insurer or the insured include its being done
by or in relation to that person’s agent.

23 Extent, commencement and short title

(1) This Act extends to England and Wales, Scotland and Northern Ireland, except
for—

(a) 30section 21(4), which does not extend to Northern Ireland; and

(b) section 21(5), which extends to Northern Ireland only.

(2) This Act (apart from Part 6 and this section) comes into force at the end of the
period of 18 months beginning with the day on which it is passed.

(3) In Part 6—

(a) 35section 19 comes into force at the end of the period of two months
beginning with the day on which this Act is passed; and

(b) section 20 and Schedule 2 come into force on the day appointed under
section 21(2) of the Third Parties (Rights against Insurers) Act 2010 for
the coming into force of that Act.

(4) 40This section comes into force on the day on which this Act is passed.

(5) This Act may be cited as the Insurance Act 2015.

SCHEDULES

Section 8(2).

SCHEDULE 1 Insurers’ remedies for qualifying breaches

Part 1 5Contracts

General

1 This Part of this Schedule applies to qualifying breaches of the duty of fair
presentation in relation to non-consumer insurance contracts (for variations
to them, see Part 2).

10Deliberate or reckless breaches

2 If a qualifying breach was deliberate or reckless, the insurer—

(a) may avoid the contract and refuse all claims, and

(b) need not return any of the premiums paid.

Other breaches

3 15Paragraphs 4 to 6 apply if a qualifying breach was neither deliberate nor
reckless.

4 If, in the absence of the qualifying breach, the insurer would not have
entered into the contract on any terms, the insurer may avoid the contract
and refuse all claims, but must in that event return the premiums paid.

5 20If the insurer would have entered into the contract, but on different terms
(other than terms relating to the premium), the contract is to be treated as if
it had been entered into on those different terms if the insurer so requires.

6 (1) In addition, if the insurer would have entered into the contract (whether the
terms relating to matters other than the premium would have been the same
25or different), but would have charged a higher premium, the insurer may
reduce proportionately the amount to be paid on a claim.

(2) In sub-paragraph (1), “reduce proportionately” means that the insurer need
pay on the claim only X% of what it would otherwise have been under an
obligation to pay under the terms of the contract (or, if applicable, under the
30different terms provided for by virtue of paragraph 5), where—

Part 2 Variations

General

7 This Part of this Schedule applies to qualifying breaches of the duty of fair
5presentation in relation to variations to non-consumer insurance contracts.

Deliberate or reckless breaches

8 If a qualifying breach was deliberate or reckless, the insurer—

(a) may by notice to the insured treat the contract as having been
terminated with effect from the time when the variation was made,
10and

(b) need not return any of the premiums paid.

Other breaches

9 (1) This paragraph applies if—

(a) a qualifying breach was neither deliberate nor reckless, and

(b) 15the total premium was increased or not changed as a result of the
variation.

(2) If, in the absence of the qualifying breach, the insurer would not have agreed
to the variation on any terms, the insurer may treat the contract as if the
variation was never made, but must in that event return any extra premium
20paid.

(3) If sub-paragraph (2) does not apply—

(a) if the insurer would have agreed to the variation on different terms
(other than terms relating to the premium), the variation is to be
treated as if it had been entered into on those different terms if the
25insurer so requires, and

(b) paragraph 11 also applies if (in the case of an increased premium) the
insurer would have increased the premium by more than it did, or
(in the case of an unchanged premium) the insurer would have
increased the premium.

10 (1) 30This paragraph applies if—

(a) a qualifying breach was neither deliberate nor reckless, and

(b) the total premium was reduced as a result of the variation.

(2) If, in the absence of the qualifying breach, the insurer would not have agreed
to the variation on any terms, the insurer may treat the contract as if the
35variation was never made, and paragraph 11 also applies.

(3) If sub-paragraph (2) does not apply—

(a) if the insurer would have agreed to the variation on different terms
(other than terms relating to the premium), the variation is to be
treated as if it had been entered into on those different terms if the
40insurer so requires, and

(b) paragraph 11 also applies if the insurer would have increased the
premium, would not have reduced the premium, or would have
reduced it by less than it did.

Proportionate reduction

11 (1) If this paragraph applies, the insurer may reduce proportionately the
amount to be paid on a claim arising out of events after the variation.

(2) In sub-paragraph (1), “reduce proportionately” means that the insurer need
5pay on the claim only Y% of what it would otherwise have been under an
obligation to pay under the terms of the contract (whether on the original
terms, or as varied, or under the different terms provided for by virtue of
paragraph 9(3)(a) or 10(3)(a), as the case may be), where—

(3) 10In the formula in sub-paragraph (2), “P”—

(a) in a paragraph 9(3)(b) case, is the total premium the insurer would
have charged,

(b) in a paragraph 10(2) case, is the original premium,

(c) in a paragraph 10(3)(b) case, is the original premium if the insurer
15would not have changed it, and otherwise the increased or (as the
case may be) reduced total premium the insurer would have
charged.

Part 3 Supplementary

20Relationship with section 84 of the Marine Insurance Act 1906

12 Section 84 of the Marine Insurance Act 1906 (return of premium for failure
of consideration) is to be read subject to the provisions of this Schedule in
relation to contracts of marine insurance which are non-consumer insurance
contracts.

Section 20

25SCHEDULE 2 Rights of third parties against insurers: relevant insured persons

1 The Third Parties (Rights against Insurers) Act 2010 is amended as follows.

Individuals subject to debt relief orders in Northern Ireland

2 (1) Section 4 (relevant persons: individuals) is amended as follows.

(2) 30In subsection (3), after paragraph (b) (deed of arrangements registered
under the Insolvency (Northern Ireland) Order 1989) insert—

“(ba) subject to subsection (4), a debt relief order made under Part
7A of that Order,”.

(3) In subsection (4) (individuals who are relevant persons for the purposes of
35section 1(1)(b) only), after “(1)(d)” insert “or (3)(ba)”.

Corporate bodies etc in administration

3 (1) Section 6 (corporate bodies etc) is amended as follows.

(2) In subsection (2) (events under the Insolvency Act 1986), for paragraph (b)
substitute—

“(b) 5the body is in administration under Schedule B1 to that Act,”.

(3) In subsection (4) (events under the Insolvency (Northern Ireland) Order
1989), for paragraph (b) substitute—

“(b) the body is in administration under Schedule B1 to that
Order,”.

10Transitional cases

4 In section 1(5)(b) (definition of “relevant person”), at the end insert “(and see
also paragraph 1A of Schedule 3)”.

5 (1) Schedule 3 (transitory, transitional and saving provision) is amended as
follows.

(2) 15At the beginning insert—

“Application of this Act”.

(3) After paragraph 1 insert—

“Relevant persons

1A (1) An individual, company or limited liability partnership not within
20sections 4 to 7 is to be treated as a relevant person for the purposes
of this Act in the following cases.

(2) The first case is where an individual—

(a) became bankrupt before commencement day, and

(b) has not been discharged from that bankruptcy.

(3) 25The second case is where—

(a) an individual made a composition or arrangement with his
or her creditors before commencement day, and

(b) the composition or arrangement remains in force.

(4) The third case is where—

(a) 30a winding-up order was made, or a resolution for a
voluntary winding-up was passed, with respect to a
company or limited liability partnership before
commencement day, and

(b) the company or partnership is still wound up.

(5) 35The fourth case is where a company or limited liability
partnership—

(a) entered administration before commencement day, and

(b) is still in administration.

(6) The fifth case is where—

(a) a receiver or manager of the business or undertaking of a
company or limited liability partnership was appointed
before commencement day, and

(b) the appointment remains in force.

(7) 5In those cases, the person is a relevant person only in relation to
liabilities under a contract of insurance under which the person
was insured at the time of the event mentioned in sub-paragraph
(2)(a), (3)(a), (4)(a), (5)(a) or (6)(a) (as appropriate).”

(4) Before paragraph 2 insert—

10“Bankruptcy and Diligence etc (Scotland) Act 2007”.

(5) Before paragraph 3 insert—

“Application of 1930 Acts”.

(6) Before paragraph 5 insert—

“Interpretation”.

15Interpretation

6 After section 19 insert—

“19A Interpretation

(1) The references to enactments in sections 4 to 7, 9(7) and 14(4) and
paragraph 3(2)(b), (4) and (5) of Schedule 1 are to be treated as
20including references to those enactments as amended, extended or
applied by another enactment, whenever passed or made, unless the
contrary intention appears.

(2) In this Act, “enactment” means an enactment contained in, or in an
instrument made under, any of the following—

(a) 25an Act;

(b) an Act or Measure of the National Assembly for Wales;

(c) an Act of the Scottish Parliament;

(d) Northern Ireland legislation.”