The Road Traffic Act 1988 is amended in respect of recovery of certificates of insurance and a summary of implications is set out below.
Insurance certificates must still be delivered to policyholders but delivery is no longer required for the policy to be effective.
Where a policy is cancelled mid-term the policyholder is no longer required to return the certificate or make a statutory declaration or any statement acknowledging the policy has ceased to have effect (and not doing so ceases to be an offence).
Insurers are relieved of the burden of retrieving certificates for cancelled policies as a pre-requisite of avoiding contractual liability.
Insurers will have greater control and clarity as the period of contractual liability can more easily be determined and the period of statutory or ‘RTA liability’ reduced.
Insurers’ potential statutory liability can be minimised provided the Motor Insurance Database (MID) is immediately updated.
These changes will come into effect on 30 June 2015.