On 30 June 2012, the Association of British Insurers ceased the practice of noting Banks’ interests on policies.  The question now arises: what legal protection does “noting” actually afford to interested parties in practice?

The “noting” of a mortgagee or other party’s interest in a property on an insurance policy is a common practice in Ireland.  What protection this actually affords to the “noted party” can, however, sometimes be misguided.  Indeed, some commentators refer to it as “illusionary”.

“Noting” a party’s interests does not make the named person a party to the insurance, nor does it confer any right to rely on the any of the insured’s rights under the policy. The position was recently confirmed in a judgment of the English High Court which held that the noting of an interest means no more than recording its existence.  The only practical significance is to place the insurer on notice that the beneficial owner of the proceeds of any claim made by the insured may be other than the insured.

It is not yet clear whether the Irish insurance industry will follow suit and end this practice.