Until now, Irish insurance law has largely mirrored English law, as most insurance law was derived from the Marine Insurance Act 1906 and EU legislation. However, following the enactment of the UK Insurance Act, insurance law in the United Kingdom and Ireland is set to be significantly different. Many Irish risks are written in the London market and are frequently subject to English law; the UK reforms are therefore expected to have a significant impact on the Irish insurance market. There is an opportunity for Irish insurers and policyholders to adopt some of the reforms on a contractual basis in the absence of legislative reform in Ireland.
The Law Reform Commission of Ireland published its draft Consumer Insurance Contracts Bill in July 2015. Unlike the UK Insurance Act, the commission's bill applies only to consumer insurance contracts. While the changes proposed in the bill are not generally as wide-reaching as those to be implemented by the UK act, there are some similarities. In particular, the bill recommends:
- changes to the duty of disclosure, but does not go so far as to recommend a duty of fair presentation (which is one of the most notable changes to be introduced by the UK act);
- proportionate remedies for non-disclosure; and
- the opportunity for an insured to remedy a breach of warranty and the abolition of basis of contract clauses.
There is no visibility on Ireland's timeline for the enactment of the bill. The Insurance Act will enter into force on August 12 2016.
Finally, while a provision providing a remedy of damages for late payment of claims was deleted from the Insurance Act at bill stage due to lack of market consensus, the same clause has been reintroduced in the Enterprise Bill. If enacted, insurers will be required to pay sums due within a reasonable time and compensation will be payable to an insured where a policyholder suffers additional loss because of an insurer's unreasonable delay in payment. The commission has also recommended that a consumer be entitled to seek damages where an insurer unreasonably withholds or delays a payment for a valid claim.
This article first appeared in the International Law Office (ILO) Litigation Newsletter, 02 February 2016.
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