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Consumer Insurance Contracts Bill 2017

AUTHOR(S): April McClements
PRACTICE AREA GROUP: Insurance and Reinsurance
DATE: 21.02.2017

The Consumer Insurance Contracts Bill 2017, introduced by Sinn Féin TD Pearse Doherty, passed the second stage in the Dáil (the lower house of Parliament) on February 9 2017 and will now proceed to the committee stage.

The bill is based on recommendations made by the Law Reform Commission in its Report on Consumer Insurance Contracts 2015 and largely mirrors the provisions of the draft bill proposed in this report (for further details please see "Proposed reform of consumer insurance contracts").

Minister for State for Financial Services Eoghan Murphy told TDs that the government is "supportive in principle" of the bill, but "likely to submit substantive amendments" at committee stage. Murphy also said that the government wanted to examine developments in EU law since the 2015 report, including the Insurance Distribution Directive which was agreed in 2016.

The bill will apply to consumer insurance contracts only (the definition of 'consumer' includes individuals and small businesses with a turnover of less than €3 million). The bill contains some similar reforms to those introduced in the United Kingdom by the Insurance Act 2015. It will replace the existing duty of disclosure with a statutory duty to answer specific questions carefully and honestly. It will abolish basis of contract clauses and replace warranties with suspensive conditions. Further, the bill will introduce proportionate remedies for innocent and negligent non-disclosure or misrepresentation and allow the insured to claim damages for late payment of claims by insurers.

At present, there is no timeline for implementation and the government has asked for the bill to be progressed slowly to allow consultation with other departments.

This article first appeared in the International Law Office Insurance newsletter, 21 February 2017

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