The Consumer Insurance Contracts Act 2019 (CICA), enacted in December 2019, has yet to be enacted. On July 16, 2020, in response to a parliamentary question about the start of the CICA, Finance Minister Paschal Donohoe TD explained that many provisions of the CICA will come into force on September 1, 2020, with sections 8, 9, 12 and 14(1) to (5) being deferred to September 1, 2021. All insurers who write “consumer business” in Ireland are advised: The Consumer Insurance Contracts Act 2019 will significantly change the way insurers contract with Irish consumers. The law provides consumers with increased protection and applies a consumer-centric lens to insurance contracts, noting that the interpretation of pre-contractual issues and the most consumer-friendly contract terms will prevail. This forces the insurer to take on additional responsibility for its interactions with consumers at all key stages of the customer journey. The Consumer Insurance Contracts Act, 2019 (the Act) was enacted on December 26, 2019. Some sections of the law were enacted on September 1, 2020, and others came into force on September 1, 2021. One of the most radical changes introduced by the CICA is the disclosure requirement. The long-standing “duty of good faith” is replaced by the policyholder`s obligation to answer certain questions of an insurer honestly and with reasonable care (with respect to the “average consumer”). The CICA recognizes an insurer`s right to refuse to pay a claim and to circumvent an insurance contract if a consumer`s response involves fraudulent misrepresentation or if a consumer`s conduct involves fraud of any kind. A fraudulent misrepresentation is a statement that the consumer knows to be false or misleading, or deliberately ignores whether it is false or misleading.
Insurers should experience this when issuing insurance documents to consumers. The Consumer Insurance Contracts Act 2019 (CICA) was transposed into Irish law on 26 December 2019. The Tier 1 provisions came into force on September 1, 2020. In addition, the policyholder is not obliged to voluntarily provide additional information beyond what is requested of him. For more information, please contact James Grennan, Laura Mulleady, Liam Kennedy, Andrea Hynes, Don Collins or your usual A&L Goodbody insurance and reinsurance team. Insurers cannot avoid an insurance contract if a consumer makes an innocent misrepresentation. The start of what is widely considered to be the most expensive sections of the Act has been postponed under the provisions of the Consumer Insurance Contracts Act (Coming into Force), 2019 Order 2020 to give insurers sufficient time to update their systems and processes. The Consumer Insurance Contracts Act, 2019 (CICA) came into force in December 2019. However, as we noted in our July 2020 CICA update, the start of the CICA has been divided into two parts, with sections 8, 9, 12 and 14(1)-(5) being postponed to September 1, 2021.
These are the most expensive provisions of the CICA and, in most cases, will likely require system and process changes on the part of insurers. Subsection 18(4) of the CICA, which refers to exclusions for property damage in certain circumstances, will not come into force. The other provisions of the Consumer Insurance Contracts Act 2019 (the Act), with the exception of Article 18(4), entered into force on 1 September 2021. Insurers are required to provide the consumer with a schedule for premiums and entitlements for the last five years at the time of renewal. With the entry into force of these initially postponed provisions of the Act, the reforms to the Consumer Insurance Contracts Act, which were carried out in response to the 2015 report of the Legal Reform Commission on Consumer Insurance Contracts, will be substantially completed. It is important to note that the provisions of the Act apply not only to individual consumers, but also to small businesses that fall within the definition of “consumer” in the Act. If you require advice on the issues discussed in this information session, please contact a member of our Commercial Litigation team. How can Liberty Insurance customers learn more? Details on the entire Customer Insurance Contracts Act 2019 are available on www.irishstatutebook.ie. The articles that have now started and that will affect the contracts that will be concluded, amended or renewed from 1 September 2021 are: Article 8, which removes the obligation of good faith in the pre-contractual phase, so that the consumer is now required to answer a number of questions from the insurer truthfully and with due diligence. Article 9, which provides for proportionate remedies in the event of misrepresentation by a consumer.
The remedy that is applicable depends on whether the misrepresentation is innocent (the insurer is required to pay the claim), fraudulent (the insurer can circumvent the contract) or negligent (the insurer must do what it would have done if it had known all the facts). Section 12, which requires the insurer to provide the consumer with a schedule detailing his premiums and fees paid over the past five years. Article 14(1) to (5), which sets out the obligations of consumers and insurers when renewing a contract. At this stage, the consumer is no longer required to provide additional relevant information unless the insurer asks him specific questions that he must answer honestly and with reasonable care. Most of the provisions of the 2019 law came into force on 1 September 2020. However, some of the more controversial aspects of the 2019 law contained in sections 8, 9, 12 and 14 will not come into force until September 1, 2021 to give insurers time to meet these requirements. If the answer given is a negligent misrepresentation, the remedy available to insurers must reflect what the insurer would have done if it had been fully aware of the facts and be proportionate (for example. B an increased premium instead of a declination). The law is changing the insurance landscape in Ireland. Your main goal is to improve the transparency of policy formulations and insurance procedures and strengthen your consumer rights.
Below we have the provisions of level 2, which took place on the 1st. September 2021, summarized and commented on their impact on insurers. The provisions apply to all consumer protection policies introduced and renewed from that date. A consumer consists mainly of companies with an annual turnover of less than €3 million. These sections represent a significant change in disclosure rules and require insurers to ensure that they obtain accurate consumer information at the time of entering into the contract. This assessment is likely to be particularly important for telephone and online sales, as the CICA will require insurers to provide consumers with additional information on paper or on a durable medium during the pre-contract and renewal phase. Insurers should review how their contracts are currently entered into and determine whether changes to the system are required to implement future changes. Insurers need to carefully consider the current wording of their policies in light of these new obligations. Insurers must ask for all the information they need when renewing and cannot expect this information to be provided voluntarily by the insured.
The key changes that will take effect on September 1, 2021 are: If you`d like to know how Lexology can advance your content marketing strategy, please email [email protected] . . .