Working group chairman says contract certainty Code of Practice is just months away
A Code of Practice to tackle contract certainty in the regional market is expected by the end of the summer, according to Duncan Boyle, chairman of the working group looking into the matter.
Writing in Insurance Times this week, Royal & SunAlliance chief executive Boyle said the code was likely to set out a "time line" for contract agreement and policy wording issue. It will also set minimum standards on the accuracy of policy documents.
"These standards may need to be variable to reflect differing complexities of risk," he commented.
Boyle said the working group's research had found that contract certainty does not seem a "major issue" in the small and retail markets, but that a "mixed picture" was emerging in the case of larger risks.
"Firstly, there is the impact of rework for minor drafting errors caused by the insurer, broker or client. Some changes are material - and affect contract certainty; many are not. But any rework is costing us all money, so reducing and eliminating this would be welcome."
Boyle added: "In addition, there can be significant debate over what is actually covered in bespoke policies."
Boyle called on the industry to work "collectively" to address contract certainty.
"Achieving contract certainty will require some changes on all our parts, but in my view we have it in our power to work collectively as an industry," he said. "By addressing this important customer issue we can improve service, and we can save ourselves some money and effort.
"It's an added bonus that, in the process, we should be able to avoid giving the FSA one more area requiring direct regulation."