The UK’s Insurance Act came into force on Friday, marking the biggest legislative shake-up in commercial insurance contract law for more than a century.

It replaces the Marine Insurance Act 1906.

The industry has welcomed the new legislative framework, which makes it harder to refuse commercial claims on grounds of insufficient disclosure and stops insurers refusing to pay if a client breaches a policy requirement unrelated to the claim.

“We are delighted the Insurance Act is now in force,” British Insurance Brokers’ Association CEO Steve White said.

“The industry has never experienced such a massive change in the legislation governing our practices, and we would like brokers and insurers to engage with each other in a way that adopts the Act’s requirements, to create a fair and transparent approach for all.”

A survey by UK risk managers’ association Airmic indicates the industry is ready to work under the new framework, which was passed by Parliament in February last year.

More than 90% of respondents say they feel fully prepared or relatively prepared, according to the poll conducted two weeks before the Act’s implementation.

“The new law represents a fundamental change in how insurers and buyers do business, and the amount of work and co-operation required cannot be understated,” Airmic CEO John Hurrell said.

“The Insurance Act is about more than changing procedures, it’s a change in culture, and this can only develop over time.

“It will be a while before we see the effects of the Act filter through and we therefore urge insurers, policyholders and buyers to continue to work together and to communicate feedback as openly as possible.”