Deregulation Act 2015
The Deregulation Act 2014/15 aims to reduce the burden of regulation on business, the taxpayer and society generally. The Bill is aligned with the Government’s ‘Red Tape Challenge’, announced in April 2011, which has targeted 3,000 regulations that need to be repealed or improved. It covers a range of areas including the use of land, housing, transport and the environment.
The Act will impact the Road Traffic Act 1988 in the following way:
- MID will become proof of cancellation
- Insurers are still required to send and deliver certificates to the policyholder (please note that back-dating of cover is still illegal)
- The delivery of a certificate is no longer required for the policy or security to be effective
- The policyholder is no longer required to return their Motor Insurance Certificate following a mid-term cancellation or make a statutory declaration that the certificate has been lost
- Insurers are no longer required to retrieve the certificate after policy cancellation to avoid ongoing liability
- Any ongoing liability will cease once MID has been updated with the policy cancellation transaction
- Insurers are no longer required to make references to the return of the certificate following a mid-term cancellation
In short, an insurer's contractual liabilities to pay third party claims under the Act will cease on cancellation of a motor policy just as they always have done.
RSA Actions
The MIB have issued some guidance notes around how these changes will impact insurers in practice, in particular around cancellation. RSA has reviewed this guidance and has made some amendments to our processes to ensure we are in line with the guidance. We will be updating our policy wordings and literature in due course, but in the meantime any conditions relating to the requirement to return the certificate of motor insurance will no longer be effective.
What You need to do
Please ensure we are notified quickly of all policy cancellations to ensure both timeliness of MID updates and accuracy of MID records. This will also ensure return premiums on cancellation are processed quickly for the benefit of your customers.