Information & Advice: What do I need to disclose for insurance?
On this page:
- Summary
- In Detail
- Frequently Asked Questions
1. Summary
- You must disclose all "unspent" criminal convictions (under the Rehabilitation of Offenders Act 1974) irrespective of whether a question is asked.
- Because of the 1974 Act, a question which asks about "any" convictions can be read to refer only to unspent convictions.
- Cautions, under a recent amendment to the 1974 Act, become spent immediately, and therefore fall into the above.
2. In Detail
Under insurance law, you must disclose what is called "all material facts", under the principle of utmost good faith. This applies regardless of whether you are asked a specific question. For more detailed information on the legal basis on which this is founded, see UNLOCK's submissions to the Law Commission in November 2008 by clicking here.
In relation to criminal convictions, you need to know about the Rehabilitation of Offenders Act 1974. Essentially, this sets out the lengths of time which a particular criminal conviction needs to be disclosed for. During this period, the conviction is termed "unspent". Once this period is completed, the conviction is "spent".
Having sought advice from the ABI on the issue of criminal convictions and how this relates to insurance, they stated that "it is an unlawful breach of statutory duty for firms to rely on spent convictions in order to disadvantage an applicant. In which case, even if an insurer asked for spent convictions, and details were provided, the insurer wouldn't be able to use them in their underwriting decision."
This is based on s.4(3)(b) of the ROA, which states that "a conviction which has become spent or any circumstances ancillary thereto, or any failure to disclose a spent conviction or any such circumstances, shall not be a proper ground for dismissing or excluding a person from any office, profession, occupation or employment, or for prejudicing him in any way in any occupation or employment."
The ROA does not impose an obligation on an insurer to only ask for unspent convictions, although it is best practice to do so, and something that UNLOCK is working with the ABI on to encourage.
The ROA does, however, allow an individual to interpret a question posed by an insurer as only relating to unspent convictions. The specific section in the ROA, s.4(3)(a) states that "any obligation imposed on any person by any rule of law or by the provisions of any agreement or arrangement to disclose any matters to any other person shall not extend to requiring him to disclose a spent conviction or any circumstances ancillary to a spent conviction (whether the conviction is his own or another’s)"
UNLOCK have again sought the advice of the ABI on this issue and how it applies to insurance. We asked them whether they agreed with our understanding that, when an insurer asks about criminal convictions, even if they ask about “any”, an individual is legitimately able, under the ROA, to interpret this as only apply to unspent convictions.
The ABI returned stating "I agree with your view – i.e. that “any convictions” in fact refers to “any unspent convictions”. This fits with a High Court decision in 2002 (R v DVLA & Another, ex parte Pearson) which indicated that it is an unlawful breach of statutory duty for firms to rely on endorsements relating to spent convictions in order to disadvantage a driver. I assume that this would read-across to non-motor insurances too. The FOS has also stated that if a firm cancels the policy of a customer who has a spent conviction but whose licence is still endorsed simply because the customer did not disclose the endorsement, it would uphold the customer’s complaint. Again, I assume this reads-across to other types of insurance."
3. Frequently asked questions
1. What if an insurer doesn't ask about criminal convictions?
There is still a requirement to disclose all ‘unspent’ convictions
Because of the principle of utmost good faith, you must still disclose any unspent criminal convictions.
When an insurer doesn’t ask about criminal convictions, you are not able to infer from this that they do not need to know about criminal convictions. This is the whole premise of the principle of utmost good faith.
If you approach an insurer which does not ask about criminal convictions, you need to ask them what their approach is towards criminal convictions.
(i) If the insurer states that they do not need to know about criminal convictions (or, in the case of motor insurance, non-motoring criminal convicitions), you should obtain some form of written confirmation from them for your own records. Do not simply rely on the fact that the telephone call is recorded.
(ii) If the insurer states that they do need to know, but that they are still able to insure you, you should obtain some form of written confirmation from them that they have made a note of the information you have disclosed on any policy that you ultimately take out with them. Again, do not simply rely on the fact that the telephone call is recorded.
Remember, just because an insurer doesn’t ask about criminal convictions, it does not mean you don’t have to tell them.
2. What if an insurer only asks about convictions in the last 5 years (or another period of time)?
You may, for example, have an unspent conviction that was obtained 8 years ago, but isn’t spent for another 2 years.
In this situation, whatever question is asked by an insure, you are still legally bound to disclose all unspent convictions to the insurer (under the principle of utmost good faith).
However, it is possible that the Financial Ombudsman Service (FOS) would support you if your insurer tried to avoid a claim due to non-disclosure of an unspent conviction that was gained more than 5 years ago and which wasn’t asked for specifically at the point of taking out the policy. For more information on the FOS approach to non-disclosure, click here.
If you are asked only about convictions in the last 5 years, UNLOCK advise that you still disclose any unspent convictions from longer than 5 years ago (and obtain confirmation that you have done so) – if it truly is their policy to only need to know of convictions in the last 5 years, then they will still be able to cover you.
3. What if, for motor insurance, an insurer only asks for motoring convictions?
When looking to obtain motor insurance, many insurers only ask specifically for motoring convictions. Despite this, you are still under a duty under insurance law to disclose all material facts, which, as is explained above (see In detail) includes all unspent criminal convictions.
If it is the case that, after disclosure, the insurer is happy to offer you a policy, you have fulfilled your disclosure obligations (Remember - obtain written confirmation of your disclosure) and you will still be able to obtain a policy.
If, however, the insurer, after you have disclosed your unspent non-motoring convictions, says they are unable to cover you (which they are within their rights to do), it only serves to emphasise the importance of disclosing the information, because if you were to have made a claim, the insurer may have attempted to avoid the claim due to non-disclosure of a material fact.
However, it is possible that the Financial Ombudsman Service (FOS) would support you in any dispute with your insurer if your insurer tried to avoid a claim due to non-disclosure of an unspent non-motoring conviction which wasn’t asked for specifically at the point of taking out the policy. For more information on the FOS approach to non-disclosure, click here.
4. I was given a Fixed Penalty Notice - this is not a criminal conviction, so do I need to disclose it?
Firstly, a Fixed Penalty Notice is not a criminal conviction. Furthermore, unlike a caution (which is also not a criminal conviction), it is not within the remit of the Rehabilitation of Offenders Act 1974.
Now, this has some potential implications. For insurance purposes, you need to disclose “all material facts”, irrespective of whether you yourself think they are material – the test is whether a prudent insurer would think they are material. UNLOCK argues that it is impossible for an individual to know what an insurer will regard as material, and this aspect of the law has come under heavy criticism by the Law Commission recently who propose to abolish this duty of disclosure.
However, the 1974 Act allows an individual to interpret any question put to him as if only relating to unspent criminal convictions. This means that, for example, if somebody was given a fine 7 years ago, it will have been spent after 5 years, and so doesn’t need to be disclosed for insurance. Unfortunately, the 1974 Act not cover FPN’s. This leaves you in a strange situation where you are not cover by the 1974 legislation.
At the end of the day, it is impossible for UNLOCK to detail what is a material fact. What an insurer regards as relevant depends entirely on their own underwriting guidelines. Therefore, UNLOCK can only really state simply what does not need to be disclosed – i.e. spent convictions. Insurers may well regard FPN’s as relevance, especially when the FPN was obtained for offences involving dishonesty. You do not have the protection of the 1974 Act to fall back on.
What this ultimately means it that you should consider disclosing your FPN to your insurer (as it may well be material to them). A record of the FPN will be held on the Police National Computer.
In practice, UNLOCK's experiences suggest that it is unlikely that an insurer will refuse to cover you based on disclosure of an FPN. However, that doesn’t negate the need to disclose it. Whether to offer cover is ultimately the decision of the insurer.
However, one thing to bear in mind here is the Financial Ombudsman’s approach to non-disclosure of information which is not specifically asked for when taking out a policy, for example an FPN. I am yet to see a question posed by an insurer which asks specifically for information relating to FPN’s. Although in law that does not necessarily negate the need to disclose such information, the FOS will, when looking at disputes between insurers and consumers, look specifically at what questions were asked. This is what the Law Commission are proposing in their reforms of the law.
5. How do I find out what unspent criminal convictions I have?
You can apply for a basic disclosure from Disclosure Scotland. For more information on this, see the page "how to find out about your criminal record"
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