Should There Be an Insertion of the Provisions on Late Payment of Insurance Claims in Marine Insurance Bill?

Abstract

In early 2019, the cabinet of Thailand approved a draft Marine Insurance Bill. In preparing it, the responsible government agency selected English marine insurance law as a model. However, before the Bill was prepared and approved, the Enterprise Act 2016 of England amended the Insurance Act 2015 by inserting provisions regarding late payment of insurance claims. This amendment draws this author's attention to examine whether Thailand should add similar provisions to the Bill. Results are that introducing these provisions were motivated by a specific cause: English law considers insurance claim payments as damages. Therefore, the insured who suffered financial loss from late payment could not be awarded damages, as the no damages on damages rule applies. The Enterprise Act 2016 solves this problem by providing an implied term to every insurance contract that the insurer must pay claims within a reasonable time. With this implied term, when the insurer delays payment, the implied term is breached and allows the insured to claim damages for late payment in the same manner as other general contracts. Comparing this to the Thai legal system, the duty of indemnification is an obligation. If insurers fail to perform their obligations within a reasonable time and this delay causes damage to the insured, insurers will be liable for damages resulting from late payment. Consequently, the Thai Bill does not need to add additional provisions as the English law because, without this implied term, the insured may obtain damages for late payment under the current legal system of Thailand.