Tower leads the way on disclosure requirements

Insurer Tower is reducing the disclosure obligations for customers. Tower chief executive Richard Harding said it would remove the duty of disclosure from its sales and claims processes before the end of the year. At present, customers must disclose any information the insurer might deem material. If they do not, the insurer can turn down a claim. But customers do not always remember, or understand what might be important to an insurer. Harding said that instead, if customers answered all the questions truthfully, they could assume they had disclosed everything that was required. ‘‘We’ve been told one of the things that concerns people the most is not knowing for certain if their claim will be accepted and paid,’’ he said. ‘‘It comes back to the tricky, catch-all question that insurers can ask when you buy insurance, along the lines of ‘is there anything else that we should know?’ which means that if customers unwittingly leave something out, they can be disappointed when it comes time to making a claim . . . by the end of the year, people who buy home, contents or car insurance from Tower will no longer be asked this question.’’ Insurance law specialist Crossley Gates said Tower’s move was likely to be required across the industry before long. The Government is conducting a review of insurance contracts law, and has flagged the issue of disclosure as a problem for consumers. One of its preferred solutions is to require insurers to ask an exhaustive list of questions to get all the information required from consumers – as Tower is proposing.