RegSol Blog

Game Changer? The Consumer Insurance Contracts Act 2019

August 2020

On 17 July 2020, the Minister for Finance, Paschal Donohoe T.D., announced that the Consumer Insurance Contracts Act 2019 (the Act) will be commenced in two stages, with some provisions taking effect from 1 September 2020.

To some relief, some of the most burdensome provisions will not take effect until 1 September 2021, giving industry insurers time to prepare. These include a revised duty of disclosure, enhanced rights for consumers on renewal rights and changes to the duties imposed on consumers and insurers on renewal.

All other provisions under the Act will apply from 1 September 2020, including those dealing with:

  • the principle of insurable interest;
  • cooling-off periods and cancellation rights;
  • post-contractual duties;
  • claims-handling duties and related requirements, including specific limitations on deferring property claims payments and proportionate remedies;
  • the replacement of warranties with the concept of "suspensive conditions"; and
  • changes to subrogation and third-party rights. 

The changes introduced by the Act mean that all insurers (life and non-life) operating consumer business in Ireland must review and update all proposal forms, policies and related documentation, as well as the manner in which pre and post-contractual processes operate. 

Insurers, and indeed all market participants impacted including brokers should progress their implementation projects as a matter of urgency. 

The Central Bank of Ireland may, under the power granted to it by Section 5 of the Act, issue a code of practice on the form of a contract of insurance and or any other requirements related to such a contract contained in the Act. It remains to be seen whether this will take the form of a revision of the Central Bank's Consumer Protection Code 2012.

Although these provisions may increase the cost of compliance, RegSol is here to assist in taking the pain out of compliance assurance. Contact us for assistance to ensure you’re ready for regulatory change.

By Judy de Castro - Regulatory Consultant