Utmost Good Faith

Question 1

Define Utmost Good Faith

Answer 1

A positive duty to voluntarily disclose accurately and fully all material facts to the risk being proposed

Question 2

Whom does the duty of disclosure apply in contracts of insurance

Answer 2

Both the insurer and proposer

Question 3

As per common law when does the duty of disclosure become enforced

Answer 3

Duty of discount is revived at each renewal stage

Question 4

What is a material fact?

Answer 4

Every circumstance is material that would influence the judgement of an insurer in fixing the premium or deciding to take on the risk

Question 5

Duty of disclosure on insured

Answer 5

Important that insured makes full and complete disclosure of all the material facts relating to the contract if they wish to covered in the event of a loss

Question 6

What are the key requirements set out by the Financial Conduct Authority (FCA) in regards to firms ensuring a customer knowing what they must disclose

Answer 6

Explain to customers;

1. responsibility to take reasonable care not to make misrepresentation and consequences.
2. duty to disclose all circumstances material to a policy and consequences of failing to do so
3. asking clear questions to customer
4. asking customer clear and specific questions about information relevant to the policy