IRELAND Law and Practice Contributed by: Grainne Callanan, April McClements and Aisling Kavanagh, Matheson LLP
rial representation made by the insured, proposer, or their agent to the insurer must be true. CICA replaces the duty of good faith in consumer insurance contracts and the MIA no longer applies to them. Since 1 September 2021, the consumer pro- poser’s duty is limited to a duty to provide responses to specific questions asked by the insurer honestly and with reasonable care. The majority of provisions of CICA took effect from 1 September 2020. The remaining sections commenced on 1 September 2021 – except for Section 18 (4), which was clarified and amended by the Insurance (Miscellaneous Provisions) Act 2022. 6.2 Failure to Comply With Obligations of an Insurance Contract Prior to CICA, the remedy for breach of the duty of utmost good faith was avoidance of the policy. CICA introduced new proportionate remedies (proportional to the effects of the misrepresentation, depending on whether it was innocent, negligent or fraudulent) for a breach of the new duty of disclosure. Section 8 (6) requires an insurer to establish an inducement to avail of the remedies under CICA for a breach of the duty of disclosure. 6.3 Intermediary Involvement in an Insurance Contract Typically, an insurance intermediary is deemed to be acting on behalf of the customer at all times during the negotiation of an insurance contract ‒ except when collecting premiums on behalf of the insurer. How- ever, certain intermediaries act for and on behalf of an insurer as a tied insurance intermediary. Under the IDR, insurance distributors are required to act honestly, fairly and professionally in accordance with the best interests of their customers, irrespec- tive of whether the intermediary is negotiating an insurance contract as an individual broker or acting as a tied insurance intermediary. The information and transparency requirements set out in the IDR require an intermediary to promptly disclose whether it is rep- resenting the customer or acting for and on behalf of the insurer before the contract concludes. Any remu- neration received by an intermediary in relation to a
contract must be disclosed to the customer. Ongoing requirements include: • good reputation of directors; • knowledge and ability of senior management and key personnel; • holding of minimum levels of professional indem- nity insurance; and • maintenance and operation of client premium accounts. 6.4 Legal Requirements and Distinguishing Features of an Insurance Contract There are no specific rules for the formation of an insurance contract under Irish law, beyond the gen- eral principles of contract law, common law and the duty of good faith. There is no statutory definition of an insurance contract and legislation does not specify its essential legal elements. International Commercial Bank plc v Insurance Corporation of Ireland set out the main characteristics of an insurance contract, which are: • an insurable interest; • payment of a premium; • the insurer undertakes to pay the insured on the happening of an insured risk; • the risk must be clearly specified; • indemnification; and • the principle of subrogation is applied where appropriate. CICA defines an insurance contract as “a contract of life insurance or non-life insurance made between an insurer and a consumer” and reforms the law relating to insurable interests. 6.5 Multiple Insured or Potential Beneficiaries It is possible to have multiple insured persons and beneficiaries under a policy. Policies can be structured as single or joint policies, as well as group policies. 6.6 Consumer Contracts or Reinsurance Contracts Consumer contracts are now governed by CICA. The legal requirements of insurance and reinsurance are the same.
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