The majority of the Consumer Insurance Contracts Act 2019 came into force from the 1st of September 2020, with 22 of the 27 sections now in operation. The Act represents a major reform of insurance contracts and re-balances the relationship between consumer and insurer. It is my full expectation this will be positive for Irish consumers. For example, amongst other things, the Act obliges insurers to engage meaningfully with consumers when a claim has been submitted; places a limit the amount of a claim settlement offer that an insurer can retain until repairs have been completed, and restricts the circumstances in which insurers can repudiate the contract on materially unrelated grounds.
While the majority of the Act is now law, I have made the decision that sections 8, 9, 12, 14(1)-(5) will come into effect on the 1st September 2021. It is important to note that significant systems changes are required by the industry before the related provisions could go live. Accordingly, the sections being commenced next year broadly relate to insurers' obligations to provide more detailed information when signing consumers up to a contract (Section 8), and providing greater consumer transparency about their claim and premium history at renewal (Section 12). Section 9 and 14(1)-(5) are intrinsically linked to the information requirements set out in section 8 and therefore also require a longer commencement period. All of these significant new contract and renewal requirements will require insurers to upgrade their systems, which require time to implement because of the technical nature and scale of what will be required.
Separately, I will consider the commencement of Section 18 when a specific technical legal point has been resolved.
In conclusion my decision to implement the Act in this manner is based on my considered judgement which recognises the significant impact some aspects of this Act has on insurers’ operations, whilst at the same time proceeding with the wider reforms this Act provides. This I believe is the most appropriate way forward for industry and consumers alike in these circumstances.
Question No. 314 answered with Question No. 46.