Is the burden shifting from consumers on non-disclosure?

The Financial Conduct Authority’s first quarterly consultation paper is making some small adjustments to the language around consumer disclosure when they take out insurance. The FCA says this is actually bringing ICOB into line with the Consumer Insurance Act 2012. The regulator says it is also bringing its policy into line with FOS and what is established as industry good practice.

But this feels like a shift, albeit a relatively subtle one. This is one key paragraph. ‘The Act replaces the duty on the consumer to volunteer information material to the insurer’s decision with a duty to take reasonable care not to make a misrepresentation during pre-contract negotiations.”

Here is another section – “Whether or not a consumer has taken reasonable care not to make a misrepresentation is to be determined in the light of all relevant circumstance. For example, the type of consumer insurance contract in question and its target market, any relevant explanatory material or publicity produced or authorised by the insurer and how clear and specific the insurer’s questions were.”

The language sounds more consumer friendly but this feels like a shift, and maybe even a slightly lower burden placed upon consumers. There are certainly some interesting issues around explaining a policy for advisers. But expert views are very much appreciated.