Home Knowledge Insurance Update: Irish Minister for Finance Announces Commencement of Consumer Insurance Contracts Act 2019

Insurance Update: Irish Minister for Finance Announces Commencement of Consumer Insurance Contracts Act 2019


On 17 July 2020, the Minister for Finance, Paschal Donohoe T.D., announced that the Consumer Insurance Contracts Act 2019 (the Act) will be commenced in two stages, with the bulk of the provisions taking effect from 1 September 2020.

Importantly, from an insurer’s perspective, some of the most burdensome provisions will not take effect until 1 September 2021, giving industry insurers much-needed time to expedite preparations. These include the abolition of the long-standing principle of ‘utmost good faith’ and its replacement with a revised duty of disclosure (Section 8); the introduction of proportionate remedies for misrepresentation (Section 9); enhanced rights for consumers on renewal rights (Section 12) and changes to the duties imposed on consumers and insurers on renewal (Section 14(1)-(5)).  

All other provisions under the Act will apply from 1 September 2020, including those dealing with:

  • the principle of insurable interest (Section 7);
  • cooling-off periods and cancellation rights (Sections 11 & 13);
  • post-contractual duties (Section 15);
  • claims-handling duties and related requirements, including specific limitations on deferring property claims payments and proportionate remedies (Sections 16 – 18);
  • the replacement of warranties with the concept of “suspensive conditions” (Section 19); and
  • changes to subrogation and third-party rights (Sections 21 – 25). 

The changes introduced by the Act mean that all insurers (life and non-life) writing “consumer” business in Ireland (as that term is defined in the Act, including potentially SME commercial business) must review and update all proposal forms, policies and related documentation, as well as the manner in which pre and post-contractual processes operate. 

The insurance industry had lobbied extensively for sufficient lead time for insurers to comply with the substantial changes required to all relevant documentation, processes and systems.  However, given the proximity of the effective date for the majority of the Act’s provisions, it is critical that insurers, and indeed all market participants impacted (including brokers), progress their implementation projects as a matter of urgency. 

To assist implementation, the Central Bank of Ireland may, under the power granted to it by Section 5 of the Act, issue a code of practice on the form of a contract of insurance and or any other requirements related to such a contract contained in the Act.  It remains to be seen whether this will take the form of a revision of the Central Bank’s Consumer Protection Code 2012, however, with the imminent commencement of the Act, it’s reasonable to expect near-term clarification of the Central Bank’s intentions in this regard.  

For more information on the key changes introduced by the Act, please read our briefing here. If you wish to discuss the Act in more detail, please get in touch with your usual William Fry contact or any member of our Insurance team. 


Contributed by Catherine Carrigy