Section 54 has been described by legal commentators as a broad remedial provision. It applies to contracts which permit an insurer to refuse to pay a claim because of some act or omission of the applicant or another person after the contract was entered into.
When considering a dispute and the application of section 54, FOS determines the dispute on the basis of:
- what is fair in all the circumstances,
- with regard to the relevant legal principles, and
- the terms of the policy and good industry practice (including relevant industry codes and prior FOS decisions).
This approach will be useful to:
- FSPs, consumers and consumer representatives who have an insurance dispute at FOS involving technical policy exclusions.
- Lawyers and other professionals who are assisting the insurance claims process.
- Anyone who wants to understand how FOS applies legal principles, industry codes and good industry practice when considering insurance disputes involving section 54.