On 4 March an insurer emailed us advising of the issue of a new policy wording effective from 1 March for new business, and 1 April for renewals. Obviously by the date of receipt we had already issued a number of March incepted policies using the old wording.
The new wording contained a number of changes, one particularly significant - a clause excluding accidental damage cover in respect of an accident subsequent to which the policyholder was convicted of drink-driving.
As policies may be issued up to a month in advance of inception date, and that at least three weeks is probably required for systems work by the broker and by his software house, and for staff training, it seems reasonable that insurers should be required to give two months' notice of changes to their cover.
This situation is sadly far from unique so it would be unfair to name and shame, but should the FSA should lay down requirements in this area as it did for renewal invitations?
On 19 January we offered to meet the FSA to discuss the many compliance issues to which we are exposed by non- or late notification of changes by insurers, but the FSA has not yet availed itself of this offer.
Perhaps policyholders should not benefit from cover if their accident results from their being over the limit. But why draw the line there? Why grant cover after a dangerous driving or careless driving conviction, or if a policyholder jumps a light, exceeds the speed limit or parks dangerously? In which case, why have insurance at all?
Other restrictions, such as garaging, are often couched in either ambiguous or totally meaningless language.
In these days of "fairness to customers", should the FSA provide guidance on whether certain cover restrictions are acceptable?
When policy wordings are changed, how can a broker prove which version he sent - particularly if the new wording had to be sent with a renewal certificate?
We have highlighted the need for version control to our partners many times in recent years, suggesting that the schedule should state the reference number of the policy booklet to which it applies.
It could easily carry this information in a date-sensitive manner. This would also solve the problem of the reader being directed to obtain the appropriate policy wording if he did not have it.
Not one insurer has taken up this idea, though none has disputed its merits.
G Foster Taylor
Taylor Price & Co