On 9 February, Minister for Financial Services Eoghan Murphy addressed the Dil in relation to the Consumer Insurance Contracts Bill, which was introduced as a private members Bill that will now proceed to Committee Stage. The Bill incorporates many of the recommendations made by the Law Reform Commission in its 2015 Report on Consumer Insurance Contracts. While the Minister expressed his support in principle for the Bill, he noted that due to its complex and wide-ranging nature, an in-depth review would be necessary and that "the Government is likely to submit substantive amendments at Committee Stage". If enacted, the Bill would represent a major change to Irish insurance law.
Changes proposed by the Bill include:
- The introduction of a definition of `consumer' that will include both natural persons and SMEs with an annual turnover of €3million or less.
- Where a consumer in a contract of indemnity is required to have an interest in the subject matter of the contract, if they can show a factual expectation of an economic benefit arising from the preservation of the insured subject matter or of an economic loss on its destruction, then they will have the requisite interest to enforce the contract.
- Consumers will no longer have a duty to make voluntary general disclosures. The pre-contractual duty of disclosure of a consumer will be confined to responding to specific questions posed by the insurer.
- Insurers will not be permitted to avoid a contract of insurance where a consumer makes an innocent misrepresentation. The remedy available to an insurer for negligent misrepresentation will be proportionate to the materiality of the misrepresentation.
- Basis of contract clauses are prohibited.
- Where an insurer unreasonably withholds payment of a valid claim or unreasonably delays making a payment, the consumer may seek damages for any consequential loss suffered as a result.
- An insurer will not be able to avoid claims liability solely on the basis that a consumer has not complied with the specified notice periods for informing an insurer that an insured event has occurred.
- Injured third parties intended to benefit under an insurance contract will be permitted to make direct claims against the insurer, where the policyholder (who may be a corporate entity) has died, become insolvent or cannot be found.
- An insurer's right to subrogation will not be exercisable against an employee of an insured employer, unless the employee caused the loss intentionally or against an uninsured person with whom the insured has a personal connection, unless the loss was the result wilful misconduct on the part of that person.
The Minister's speech can be accessed here.
A link to the Consumer Insurance Contracts Bill 2017 is here.