The Central Bank of Ireland (CBI) has written to insurers to highlight the risk of under-insurance in the home insurance market, in light of the impact of inflation on construction costs.
The CBI's review of the home insurance market identified shortcomings in two areas:
- clarity, consistency and timeliness of communication with consumers, and
- the effectiveness of risk management tools in identifying and assessing risk to consumers.
The CBI also outlined its supervisory expectations for insurers who provide home insurance products to consumers, namely:
- send a clear communication of the risks associated with under-insurance to policyholders, in a stand-alone, written form;
- put in place a clear plan to address the points raised in the letter and send it to the CBI by 28 October 2022;
- ensure the board has appropriate oversight of the plan; and
- act honestly, fairly and professionally in the best interests of its customers and the integrity of the market.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.