Meanwhile broker and insurer representative bodies in the UK have laid out key steps they have taken to prepare for the Act and further areas of focus as it plays out. S&P have said that their ratings on UK insurers remain unaffected by the Act that came into force last week.
A survey of Airmic members carried out in the two weeks prior to the Insurance Act's implementation reveals that over 90% of respondents feel they are fully or relatively prepared for the law change. They appear equally satisfied with the preparedness of the wider market. 90% stated that their brokers are at least relatively prepared and 85% that insurers are at the same level.
The findings suggest a big improvement in the preparedness of policyholders amid fears that they and the market may struggle with implementing the Act in time. Only half of Airmic members survey in September last year said they were prepared for the Act that brings in more protection for insurers but increases certain obligations on them in areas such as disclosure and fair presentation of risk.
"The new law represents a fundamental change in how insurers and buyers do business and the amount of work and cooperation required cannot be understated. Our survey results are therefore extremely encouraging: the whole market should be congratulated on coming this far," said John Hurrell, Airmic CEO.
He stressed however that there is more work ahead for all in the market. "The Insurance Act is about more than changing procedures, it's a change in culture and this can only develop over time. It will be a while before we see the effects of the Act filter through and we therefore urge insurers, policyholders and buyers to continue to work together and to communicate feedback as openly as possible," he said.
The British Insurance Brokers' Association (BIBA) welcomed the introduction of the Act. It believes brokers are now well positioned to advise clients on the Act. However it warned that the Act will not deliver absolute certainty for clients until it has been tested in court. BIBA also called on insurers that choose to contract out of the Act, or parts of it, to be honest, upfront and flag any disadvantageous terms to brokers.
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