On October 20, 2021, the 2021 bill on the general insurance scheme (miscellaneous provisions) (the bill) was published. It is proposed that the bill addresses several insurance-related issues that have emerged since the publication of the Insurance Reform Action Plan in December 2020.
In this note, we summarize the main provisions of the bill.
Proposed Amendments to the Consumer Insurance Contracts Act 2019
- Section 16 (10) of the Consumer Insurance Contracts Act 2019 (ICCA 2019) sets out the disclosure obligations of consumers and insurers in handling complaints. The government has recognized that the wording of section 16 (10) may have had the unintended consequence of infringing professional secrecy. For this reason, it is proposed that Article 16 (10) be repealed and replaced by Article 16 (A). Section 16 (A) clarifies that the scope of the disclosure requirement does not extend to requiring the disclosure of inside information.
- A new section is to be inserted in CICA 2019 to require all non-life insurers to notify a claimant of any deduction made from the final settlement amount of a claim, the reason for the claim and the amount. final deducted. The objective of this section is to ensure that insurers are fully transparent with consumers with regard to deductions made in connection with the settlement of a claim, in particular with regard to state aid which may have been provided to the consumer for a reason.
Proposals for amendments to the regulations of the European Union (insurance and reinsurance) 2015
The proposed changes to the European Union (insurance and reinsurance) regulations of 2015 aim to resolve some issues regarding the temporary liquidation regime (RTR). The TRR was introduced after Brexit to allow eligible insurers based in the UK and Gibraltar (Companies) and insurance intermediaries to administer their existing insurance portfolios with a view to terminating their activities in Ireland.
The proposed changes will clarify the position of:
- Companies in liquidation, which otherwise meet the conditions of the TRR, to enter the TRR and will specify that the Central Bank of Ireland (CBI) will not withdraw the authorization of the TRR from Companies entering into liquidation.
- TRR companies which are in the process of liquidating their insurance liabilities in Ireland and which also carry out reinsurance business in Ireland. The proposed amendment to Regulation 10 (3) will expressly provide for the possibility for companies to carry out reinsurance business in Ireland, under the same conditions as other (re) insurers outside the EEA.
Proposal for a requirement for the CBI to report on the price trend
In July 2021, the CBI released its final report on its review of differential pricing in the Irish home and car insurance markets. The report identified the “price march” as a particular problem. The “price walk” is the practice whereby customers are charged higher premiums over the expected cost of coverage the longer they stay with an insurance provider and is a form of differential pricing. In its final report, the CBI made a number of proposals, including banning the practice of price walking. Subject to the outcome of its industry consultation on the proposals which closed on October 22, the CBI signaled its intention to implement these proposals by adding new provisions to the 2012 Consumer Protection Code (the CPC) with effect from July 1, 2022.
Title 4 of the bill would require that a report be produced by the CBI 18 months after the bill has passed and entered into force, to show the measures it has taken (such as amending the CPC) with regard to the price movement and to give its opinion on a number of areas, in particular whether further legislative or regulatory measures are necessary. Once available, the CBI report will be presented to both Houses of the Oireachtas to help facilitate policy development.
Proposed Amendments to the National Claims Information Database (CBI) Act 2018
The bill proposes to amend the National Claims Information Database (CBI) Act, 2018 to increase the transparency of claims by allowing the CBI to collect data regarding insurers deducting the value of state aid from claims settlements. insurance or amounts paid for insurance claims.
As of yet, there is no clear timeline for the enactment of the bill. The bill must go through a pre-legislative review, which involves meetings with relevant stakeholders. Once this step is completed, the final drafting of the legislation will begin. It is expected that there will be some degree of political impetus behind moving aspects of the proposed bill forward, which may mean that the bill will be enacted as soon as possible.