UNLOCKing Insurance
On this page:
- Summary
- Need
- Objectives
- Activities
- Achievements
- Current Situation
- Recent Media
- Useful Documents
1. Summary Back to top
Insurance is fundamental to inclusion in modern society. However, people with previous convictions face exclusion from insurance companies who often impose blanket bans. This can result in families being made homeless, businesses going under and severely limited employment opportunities. UNLOCK helped set up the first specialist broker service for people with unspent convictions and has since developed a panel of 13 brokers covering a broad range of insurance products. UNLOCK is currently working with industry and Govenrment to tackle the attitudes of the mainstream insurers.
2. Need Back to top
Of the 7.3 million people on the Home Office’s Offender Index , around 99% are in the community. At a number equal to one quarter of the UK’s working population, these 7.2 million citizens; men, women, parents, grandparents, children, employees and employers, constitute a significant part of UK life.
However, under the current policies and practices of the UK’s mainstream insurers, people with unspent convictions, and those that live with them, are essentially barred from securing even basic insurance. This can have serious emotional, social and economic consequences for the individual, their family and society as a whole.
The Rehabilitation of Offenders Act (1974) or ‘ROA’ sets a time period, based on the sentence given, during which past convictions must be declared to employers or insurers. These ‘rehabilitation periods’ are many times longer than the actual sentence given and in some cases last forever. Until this period passes, the conviction is defined in law as unspent and the individual will face exclusion.
Such consumers are damned if they disclose and damned if they don’t. All insurers consider unspent convictions as material facts. Under the blanket exclusion policy, the mainstream insurers will simply refuse to offer or cancel any cover for people with unspent convictions or a policyholder living in the same home.
Many former offenders are not aware of the requirement to disclose unspent convictions. This is largely due to a lack of awareness, or even interest, regarding the ROA and its application to insurance law amongst many organisations both within criminal justice and the insurance industry. The onus is always on the insured, so if full disclosure is not made, consumers can pay premiums over long periods in the belief that they are covered, when in fact their policies are void.
Without buildings insurance, mortgages become unavailable or rescinded and families lose their homes. Without motor insurance, personal transport is lost, preventing access to many jobs and impeding family life. Without access to commercial insurance small businesses are unable to trade and self-employment opportunities disappear. These consequences are negative for the UK as a whole.
See our page on case studies for examples of the difficulties that people with convictions face with insurance.
3. Objectives Back to top
- Develop and maintain a comprehensive database of companies offering non-discriminatory insurance & mortgages products to ex-offenders
- Work with relevant organisations to effect policy change amongst insurers, in order that reformed offenders have access to competitive insurance products.
4. Activities Back to top
- Provide advice and guidance via phone, letter, email and web
- Develop and disseminate leaflets directly and via relevant service organisations
- Deliver capacity-building training as part of UNLOCKing Financial Capability
- Develop the evidence base about the financial exclusion of people with convictions
- Develop partnerships with industry
- Attended and spoke at the ABI Tackling Crime Conference, making the case for insuring people with past convictions
- Work with the media to increase public awareness
- Lobby Government for legislative change
5. Achievements Back to top
- Established a specialist insurance broker service for people with unspent criminal convictions
- Developed market for specialist insurance with 13 brokers now competing
- FSA ordered internet aggregator websites to change their practices as a result of evidence provided by UNLOCK
- Widely reported joint press release with the British Insurance Brokers Association (BIBA) calling for the fair treatment of people with convictions
- Adoption of the issue by the Association of Britsh Insurers 'Access to Insurance Working Group', towards an industry-wide solution
- Recognition in the Law Commission reforms to Insurance Law of the difficulties that people with convictions face when it comes to knowing what to disclosure under the current law, with proposals made to require insurers to rely on clear questions being asked and removing the need to disclose unless specifically asked
- Contributed to the ABI Good Practice Guide on Buying Insurance Online, having particular influence on the sections on ensuring customers are warned of the dangers of entering inaccurate information and on ensuring customers with non-standard needs are referred on to appropriate sources of help. All ABI members (except one comparison websites) have signed up to it. They will be looking to make changes in line with this over coming months.
- Point 3.77 of the Treasurys’ 2010 Budget (p.47, p.53 of the pdf) states that “the ABI will continue to work to improve access to insurance by developing guidance for insurers on how to treat customers with criminal convictions.” This is a result of the positive work that UNLOCK have been doing with the insurance industry to improve the practice of insurers towards customers with criminal convictions, and follows the publishing a guidance the other month on buying insurance online, which was also published by the ABI.
6. Current Situation
On the 15th December 2009, the Law Commission published their proposed reforms to insurance law, including a draft Bill which is to be laid before Parliament in 2010, to address the current problems around disclosure. UNLOCK met with the Law Commission in November 2008 when they were working on their current proposals, where we made a submission around the issue that people with criminal convictions face when taking out insurance in terms of disclosure.
In their full report, the Law Commission take on board the issues that UNLOCK raised, making reference at numerous times to the difficulties that people with convictions face in terms of disclosing their convictions. UNLOCK are also featured on page 33 of the full report.
Their recommendations are to abolish the duty to volunteer “material facts” under the current law. This currently causes major problems for people trying to obtain insurance where questions about criminal convictions are not asked because under the law you are still required to disclose any “unspent” convictions. The Law Commission are essentially codifying what is already the practice of the Financial Ombudsman, but changing the will put the consumer in a much stronger position legally, as well as making it clear what the insurer does and does not regard as relevant.
Unfortunately, for the time being, the current situation remains. Irrespective of whether a question is asked, you must disclose any unspent criminal convictions, and get confirmation that you have done so. Otherwise, you run the risk of your insurance policy being worthless.
7. Recent Media Back to top
8. Useful Documents Back to top
ABI Working Group Paper
UNLOCKing Insurance Issues and Evidence
CII Thinkpiece
UNLOCK's Submission to the Law Commission
UNLOCKing Insurance - A Guide to non-disclosure
UNLOCK's List of Insurers
UNLOCKing Insurance Leaflet
UNLOCKing Insurance: Case Studies
ABI Good Practice Guide - Ensuring positive experience of buying insurance online
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