The insurance market in Ireland is facing a significant impact when in August of this year the UK implements the Insurance Act 2015. The Act marks the first significant reform to commercial insurance law in the UK in over a century and will make a number of far reaching and substantial changes.
"As a result of the upcoming implementation of the UK Insurance Act 2015, insurance law in Ireland will be significantly different from the UK law. Many Irish risks are written subject to UK law and therefore, it is important that both insurers and policyholders in Ireland become familiar with the reforms proposed in the UK."
This was the warning from Matheson Partners Sharon Daly and April McClements at the Matheson hosted special event held on 4 February, which looked at the UK Insurance Act 2015 from an Irish legal and business perspective.
Ms McClements went on to note that:
"The UK insurance market is the third largest market in the world. As the two markets are closely connected, I think it is critical for the Irish insurance industry to understand what drove the UK reforms and to consider the necessity of introducing similar reforms here in Ireland. It is generally accepted that insurance law in Ireland is in need of reform and is outdated and ineffective. The Law Reform Commission has recommended reforms to insurance contract law but there is no timeline for implementation.
I have no doubt that the innovative insurance firms will want to consider the issues and opportunities that may arise for both insurers and policyholders to adopt some of the reforms on a contractual basis in advance of any legislative reform here."
The UK-based speakers for the event included Paul Lewis, Partner at Herbert Smith Freehills in London and Paul Goulding, Head of Insurance at the British Airport Authority.
"As the UK insurance market gears up for the most significant reform of insurance law in over 100 years, it is crucial that parties whose policies are subject to any of the laws of the UK are aware of the changes the new law will bring about. This will ensure that they benefit fully from the new legislation and avoid some of the pitfalls that exist for the unwary. We are delighted to be assisting Matheson in bringing awareness of these issues to the Irish insurance industry," said Paul Lewis.
The more notable changes to be introduced by the Insurance Act include:
- The duty of disclosure. The Act shifts some of the responsibility of disclosure from the insured by imposing a duty of enquiry on the insurer and limiting the insured's duty of disclosure.
- The Act also introduces a new duty of "fair presentation" which requires policyholders to make a simpler and more transparent disclosure to insurers.
- Proportionate remedies for non-disclosure are introduced, for the first time. The insurer will no longer be entitled to simply avoid an entire policy due to a failure by the insured to disclose all material information.
About the Insurance Act 2015
The Insurance Act 2015 is a UK Act of Parliament that makes significant reforms to insurance law. When the Act comes into force in August 2016, it will represent the greatest change to insurance contract law in the UK in over 100 years. The new Act is a consequence of the Law Commission's millennium review of the law of insurance in general.
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