Consumer Insurance Contracts Act 2019

Cited as:IR No. 53/2019
Jurisdiction:Ireland


Consumer Insurance Contracts Act 2019

2019 53

An Act to reform the law of consumer insurance contracts and to provide for related matters.

[26 December 2019]

S-1 Interpretation

1 Interpretation

1. In this Act—

“average consumer” has the meaning given to it by Directive No. 2005/29/EC of the European Parliament and of the Council of 11 May 20051 1concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No. 2006/2004 of the European Parliament and of the Council;

“consumer” has the meaning given to it by paragraph (a) of the definition of that expression (as it is defined in relation to a financial service) in section 2(1) of the Financial Services and Pensions Ombudsman Act 2017 but, for the purposes of this Act, that paragraph (a) shall apply as if references in it to “financial service” and “financial service provider” were construed, respectively, as references to “consumer insurance contract” and “insurer” within the meaning of this Act;

“continuing restrictive condition” means any condition, however expressed, that purports to require a consumer to do, or not to do, a particular act or acts, or requires him or her to act, or not to act, in a particular manner (and any condition the effect of which is that a given set of circumstances is required to exist or to be maintained or not to exist shall be taken as falling within this definition);

“contract of insurance” means, except where otherwise provided in this Act, a contract of life insurance or non-life insurance made between an insurer and a consumer;

“durable medium” means any instrument that enables a recipient to store information addressed personally to the recipient in a way that renders it accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored;

“fraudulent misrepresentation” means a misrepresentation that is false or misleading in any material respect and which the consumer either—

(a) knows to be false or misleading, or

(b) consciously disregards whether it is false or misleading, and “fraudulent” or “fraud” shall be construed accordingly;

“insurance intermediary” has the meaning given to it by Regulation 2 of the European Union (Insurance Distribution) Regulations 2018 (S.I. No. 229 of 2018);

“insurer” means an insurance undertaking, that is to say, an insurance undertaking within the meaning of, as appropriate, Regulation 3 of the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015), Regulation 2 of the European Communities (Non-Life Insurance) Framework Regulations 1994 (S.I. No. 359 of 1994) or Regulation 2 of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);

“life insurance” has the meaning given to it by Regulation 3 of the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015);

“Minister” means the Minister for Finance;

“non-life insurance” has the meaning given to it by Regulation 3 of the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015).

1 OJ No. L 149, 11.06.2005, p.22

S-2 Scope of Act

2 Scope of Act

(1) Except where otherwise provided, each provision of this Act applies to life and non-life contracts of insurance entered into, and variations to such contracts of insurance agreed, between an insurer and a consumer after the commencement of the provision concerned.

(2) This Act does not alter or affect any rights or obligations concerning or arising from—

(a)

a contract of reinsurance,

(b)

a contract of insurance that falls within class 1(d), 4, 5, 6, 7, 11 or 12 referred to in Schedule 1 to the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015),

(c)

a contract of insurance involving a special purpose vehicle within the meaning of the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015), or

(d)

the duties of the Motor Insurers’ Bureau of Ireland in the conduct of its activities in relation to sections 19 to 21.

(3) No provision of the Marine Insurance Act 1906 applies to a contract of insurance to which this Act applies.

(4) No provision of the Life Assurance Act 1774, as extended to Ireland by the Life Insurance (Ireland) Act 1866, applies to a contract of insurance to which this Act applies.

S-3 Amendment of Schedule 2 to Central Bank Act 1942

3 Amendment of Schedule 2 to Central Bank Act 1942

(1) The Central Bank Act 1942 is amended in Part 1 of Schedule 2 by the insertion of the following:

(2) With respect to the amendment effected to the Central Bank Act 1942 by subsection (1), and that amendment only and so as not to affect the operation of the general law specified in subsection (3), where a reference occurs in any section of this Act, specified in that amendment, to “insurer”, that reference shall be construed, where an insurance intermediary is acting on behalf of an insurer, as including a reference to the insurance intermediary.

(3) The general law referred to in subsection (2) is the general law, as it applies to this Act, whereby an act or omission done or made by an agent, such as an insurance intermediary, on behalf of an insurer is regarded as an act or omission done or made by the insurer.

S-4 Amendment of section 60 of Financial Services and Pensions Ombudsman Act 2017

4 Amendment of section 60 of Financial Services and Pensions Ombudsman Act 2017

4. Section 60 of the Financial Services and Pensions Ombudsman Act 2017 is amended by the insertion of the following subsections after subsection (4):

“(4A) (a) In paragraph (b) and subsections (4B) and (4C) “Act of 2019” means theConsumer Insurance Contracts Act 2019.

(b) Subsection (4B) is without prejudice to the generality of subsection (2) as it operates to enable the Ombudsman to make decisions by reference to, amongst other things, the enactments concerning the financial service concerned, including, as the case may be, the Act of 2019.

(4B) The provisions ofsection 26 of the Act of 2019 apply in relation to the power of the Ombudsman under subsection (4)(d) to direct the payment of compensation in a complaint involving a contract of insurance as they apply in relation to the power of a court of competent jurisdiction to make an award of damages in a claim under a contract of insurance.

(4C) The power undersection 26 of the Act of 2019 shall not be exercised by the Ombudsman to an extent that such exercise would have the result that the total sum of compensation payable in respect of the complaint concerned exceeds the amount which, by way of compensation, the Ombudsman has jurisdiction to direct the payment of under this Act.”.

S-5 Regulations and codes of practice

5 Regulations and codes of practice

5. The Central Bank of Ireland may issue a code of practice concerning the form of, a contract of insurance or any other requirements related to such a contract contained in this Act.

S-6 Effect of codes of practice

6 Effect of codes of practice

6. A code of practice, made under any enactment or instrument under an enactment, which contains practical guidance that would assist a court or other adjudicatory body such as the Financial Services and Pensions Ombudsman in determining any issue before it in connection with a consumer insurance contract to which this Act applies, shall be admissible for that purpose and may be taken into account.

S-7 Insurable interest

7 Insurable interest

(1) A claim by a consumer under an otherwise valid contract of insurance shall not be rejected by the insurer by reason only that the consumer does not have, or did not have at the time when the contract was entered into, an interest in the subject-matter of the contract.

(2) Where the consumer is required, because the contract of insurance is also a contract of indemnity, to have an interest in the subject-matter of the contract, the interest required shall not extend beyond a factual expectation either of an economic benefit from the preservation of the subject matter, or of an economic loss on its destruction, damage or loss that would arise in the ordinary course of events.

(3) An insurer is not relieved of liability under the contract of insurance by reason only that the name of the person who may benefit under the contract is not specified in a policy document.

S-8 Pre-contractual duties of consumer and insurer

8 Pre-contractual duties of consumer and insurer

(1) The duties in this section replace, at the pre-contractual stage of a contract of insurance, the principle of utmost good faith ( uberrima fides) and any duty of disclosure of a consumer (including any duty on the consumer to volunteer information) that applied prior to the commencement of this section (whether that principle or duty arose at common law or under an enactment).

(2) The pre-contractual duty of disclosure of a consumer is confined to providing responses to questions asked by the insurer, and the consumer shall not be under any duty to volunteer any information over and above that required by such questions.

(3) Where the insurer requests the consumer at the pre-contractual stage to provide information to the insurer, the insurer shall be under a duty to ask specific questions, on paper or on another durable medium, and shall not use general questions.

(4) It shall be presumed, unless the contrary is shown, that the consumer knows that a matter about which the insurer asks a specific question is material to the risk undertaken by that insurer or the calculation of the premium by that insurer, or both.

(5) (a) Where the insurer asks questions these shall be drafted in plain and intelligible language, and the onus of proving that the questions are plain and intelligible shall rest with the insurer.

(b)

Where there is an ambiguity or a doubt about the...

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