Claims handling – criminal or intentional acts exclusions
The final section of the Consumer Insurance Contracts Act 2019 (“CICA”) was commenced on 13 May 2026. Insurers should review their consumer policy wordings and claims processes to ensure that they remain CICA compliant.
CICA was the most significant insurance law reform in Ireland in over 100 years and was intended to provide greater protections to consumer insurance policyholders and address the perceived imbalance between insurers and policyholders.
The final section of CICA, section 18(4) applies to exclusions for loss or damage to property caused by a criminal or intentional act or omission of a co-insured. Under section 18(4), such an exclusion can only be applied to exclude the claim of the individual who caused, abetted, or consented to the loss, and not to the claim of an innocent co-insured on the policy.
From enactment to commencement
CICA was signed into law on 26 December 2019 and brought into effect in two phases, with the majority of provisions coming into effect on 1 September 2020 and sections 8, 9, 12 and 14 following in September 2021. Section 18(4) was not commenced in either phase.
Section 18(4) was intended to protect innocent insureds from the fraud of a co-insured. However, there were concerns that the original language of section 18(4) was too widely drafted with potential unintended consequences. The original provision provided that criminal act exclusions would only apply to exclude cover for the person whose act or omission had caused the loss or damage (whether an insured or another person). This created practical difficulties in relation to standard exclusions which are included to make clear what is outside the scope of cover. For example, war or terrorism exclusions, which are frequently included in policy wordings because cover for damage arising from war or terrorism is beyond the scope of the particular policy. Section 18(4) could potentially operate to disapply these standard exclusions (where by their nature the damage would be caused by a third party wrongdoer).
Section 18(4) was ultimately amended by section 9 of the Insurance (Miscellaneous Provisions) Act 2022. This replaced paragraph (a) and requires that the criminal act exclusion must relate to acts by a co-insured (and not a third party). It also added a carve-out in paragraph (b) for exclusion clauses relating to loss or damage caused by war, an act of terrorism, a nuclear attack or a cyberattack, and inserted paragraph (d) to provide a statutory definition of a co-insured for the purposes of this provision. It appears that the effect of these amendments is that the protections for consumers envisaged by the legislature can be provided without broad unintended consequences and widening the scope of particular policies beyond what was intended to be covered.
How does section 18(4) affect criminal and intentional acts exclusions?
Where a criminal or intentional act exclusion exists, it applies only to the claim of a policyholder who:
- caused the loss or damage by their own act or omission;
- abetted or colluded in the act or omission; or
- consented to the act or omission and knew, or ought to have known, that it would cause the loss or damage.
A co-insured is defined for the purposes of section 18(4) as a consumer who both has an interest in the insured property and is insured against loss or damage to that property. Both conditions must be satisfied.
One of the conditions for the exclusion to apply is consent and knowledge; suspicion on the part of the innocent party is not enough to exclude their claim, if they have not consented to the act or omission.
For insurers, this means that an assessment is required of each insured’s knowledge of the wrongful act as a matter of fact. An innocent consumer co-insured whose cover would otherwise be excluded must cooperate with the insurer in the investigation of the loss, including:
- by submitting a statutory declaration if requested by the insurer; and
- by producing for examination, at a reasonable time and place designated by the insurer, documents specified by the insurer that relate to the loss.
Caveats
Section 18(4)(b) sets out two important caveats:
- an innocent co-insured cannot recover more than their proportionate interest in the lost or damaged property – 50% ownership means 50% recovery, not the full loss; and
- the protection does not affect any policy exclusion for loss or damage to property caused by war, an act of terrorism, a nuclear attack or a cyberattack; those exclusions continue to apply in the usual way, and this prevents the scope of cover being inadvertently extended beyond that which was intended.
Key takeaways for insurers
- Insurers should review the exclusions in their consumer policy wordings in light of the commencement of this final provision of CICA. Claims processes should also be reviewed; and
- When considering whether a criminal or intentional act exclusion applies in a particular case, individual factual assessment must be carried out in respect of each co-insured and their knowledge, keeping in mind that CICA also imposes cooperation obligations on the innocent co-insured in respect of the investigation of the loss.
Contact us
For more information, please contact Disputes and Investigations partners April McClements and Aisling Kavanagh, Financial Institutions Group partner Gráinne Callanan, or your usual Matheson contact.
