Insurance, Ireland updates

Supreme Court decision puts after-the-event insurance under spotlight
Matheson
  • Ireland
  • October 10 2017

A recent Supreme Court decision confirming that third-party litigation funding in return for a share of the proceeds is unlawful in Ireland has put after-the-event (ATE) insurance back in the spotlight as the only legitimate alternative method of funding litigation. Although a relatively new insurance product, a number of insurers are now providing ATE insurance in Ireland.

Minimum Competency Code to incorporate implementation of EU Insurance Distribution Directive
Matheson
  • Ireland
  • September 19 2017

The Minimum Competency Code 2017 has been introduced to incorporate the implementation of the EU Insurance Distribution Directive, the EU Markets in Financial Instruments Directive II and associated European Securities and Markets Authority guidelines and the European Regulations 2016. The main changes under the code relate to the qualification and experience requirements of the staff of financial services providers.

Fasten your seat belts: driverless cars to rev up insurance industry
Matheson
  • Ireland
  • June 13 2017

The existing legislative and regulatory framework for motor insurance in Ireland is driver-centric and needs to adapt for the era of autonomous vehicles. At present, driving is defined as 'managing and controlling' a vehicle. This is not appropriate for autonomous vehicles, where the technology and not the driver controls the vehicle. The legal landscape must keep pace with this cutting-edge technology and efforts must be made now to consider how best to address the various issues which will arise.

Consumer Insurance Contracts Bill 2017
Matheson
  • Ireland
  • February 21 2017

The Consumer Insurance Contracts Bill 2017 recently passed the second stage in the Dáil (the lower house of Parliament) and will now proceed to the committee stage. The bill will apply to consumer insurance contracts only. It will replace the existing duty of disclosure with a statutory duty to answer specific questions carefully and honestly and will allow the insured to claim damages for late payment of claims by insurers. At present, there is no timeline for implementation.

Avoidance of life assurance policy for non-disclosure of material facts
Matheson
  • Ireland
  • December 20 2016

The High Court recently upheld a finding of the Financial Services Ombudsman that an insurer was entitled to avoid a life assurance policy on the grounds of non-disclosure. Significantly, the decision turned on the strength of the proposal form and serves as a useful reminder to insurers of the importance of a well-drafted proposal form.

Outsourcing under EU Solvency II regime
Matheson
  • Ireland
  • June 21 2016

The EU Solvency II Directive was transposed into domestic Irish law by the European Union (Insurance and Reinsurance) Regulations. The Solvency II regime provides welcome clarity regarding the functions that an insurer may outsource and the requirements which must be complied with before outsourcing. This is particularly welcome news for captive insurers which tend to rely heavily on outsource service providers.

Solicitors' professional indemnity insurance regulations do not create third-party rights
Matheson
  • Ireland
  • March 08 2016

The High Court recently confirmed that third-party rights against insurers in Ireland are restricted, providing comfort for insurers in the context of solicitors' professional indemnity insurance. The decision is consistent with recent confirmation from the authorities that third parties have no direct right of action against insurers. To the extent that a specific statutory provision permits a restricted right of action, the insured defendant's liability must be established in the first instance.

Court of Appeal upholds High Court decision regarding real rate of return
Matheson
  • Ireland
  • February 23 2016

The Court of Appeal recently ruled in a case which considered the 'real rate of return' discount which would be applied to an injured plaintiff's future care costs. When quantifying future losses in personal injury actions, future care costs may now be discounted by only 1% and as a result underwriters will be ordered to pay out higher lump-sum damages awards. There is likely to be a knock-on effect which will see underwriters increasing premiums.

Fitness and Probity Regime for (re)insurance undertakings
Matheson
  • Ireland
  • February 09 2016

The Central Bank of Ireland's Fitness and Probity Regime has been reviewed to determine its compatibility with the EU Solvency II Directive. A number of amendments are set to be made to the regime for all (re)insurance undertakings, including changes to key function holders, outsourcing key functions, the head of the actuarial function and the removal of the chief actuary and signing actuary.

Irish insurance market to be affected by upcoming UK reform
Matheson
  • Ireland
  • February 02 2016

The Law Reform Commission of Ireland recently published its draft Consumer Insurance Contracts Bill 2015. Unlike the UK Insurance Act, the commission's bill applies only to consumer insurance contracts. While the changes proposed in the bill are not generally as wide-reaching as those to be implemented by the UK act, there are some similarities, including changes to the duty of disclosure and proportionate remedies for non-disclosure.

Solvency II Directive transposed into Irish law
Matheson
  • Ireland
  • January 26 2016

The European Union (Insurance and Reinsurance) Regulations 2015 were recently signed by the minister for finance, transposing the EU Solvency II Directive into Irish law. The regulations establish new capital requirements, valuation techniques and governance and reporting standards. They also provide the Central Bank of Ireland with increased supervisory responsibilities.

Periodic payment orders on horizon for catastrophically injured plaintiffs
Matheson
  • Ireland
  • November 03 2015

The General Scheme of the Civil Liability (Amendment) Bill provides that a court awarding damages for future monetary loss in respect of catastrophic injury may order that all or part of the damages be paid as periodic payments where it is in the best interests of the plaintiff. The use of a periodic payment order is intended to transfer risk from the plaintiff to the insurer. However, the plaintiff will bear the risk that the insurer could become insolvent.

High Court confirms that third-party rights against insurers are restricted
Matheson
  • Ireland
  • October 27 2015

The recent High Court decision in Michael Murphy v Allianz Plc provides further clarification of the scope of Section 62 of the Civil Liability Act 1961 – in particular, the conditions which must be satisfied for its application. The decision will be welcomed by insurers, as it confirms yet again that the Irish courts will require strict compliance where an injured third party seeks to rely on Section 62.

FSO erred in upholding avoidance of home insurance policy for material non-disclosure
Matheson
  • Ireland
  • October 20 2015

The High Court recently considered whether the Financial Services Ombudsman (FSO) had erred in law in determining that an insurer was entitled to void a home insurance policy for material non-disclosure. The court noted that the case concerned a consumer contract and thus all comments and findings of the court were made exclusively in that context. The court concluded that the deputy FSO had erred in law on at least five grounds.

Proposed reform of consumer insurance contracts
Matheson
  • Ireland
  • October 13 2015

The Law Reform Commission has published its long-awaited report on consumer insurance contracts. The report makes 105 recommendations for reforms to the rules. According to the commission, the existing rules do not reflect the realities of the bargaining powers of consumers compared to large insurers. If adopted, insurers will have to redraft their consumer insurance policies.

Insurer to prove alleged non-disclosure by oral evidence
Matheson
  • Ireland
  • August 04 2015

The High Court recently refused an application by an insurer for leave to deliver interrogatories, finding that the alleged material non-disclosure must be proved by oral evidence at trial. The insurer had obtained extensive discovery of the deceased's medical records, enabling it to phrase the interrogatories with precision. However, the court concluded that the plaintiffs should have the opportunity to cross-examine the defendant's witnesses.

Serious illness cover misunderstood, but not mis-sold
Matheson
  • Ireland
  • July 28 2015

In a recent case, a couple's claim for rheumatoid arthritis was refused by the insurer because the policy did not include serious illness cover. The appellant complained to the Financial Services Ombudsman (FSO) on the basis that she and her husband believed that they were covered for all manner of serious illnesses under the policy, rather than only certain specified illnesses. The FSO found that the complaint was unsubstantiated.

Insurers entitled to rely on additional reasons post-declinature
Matheson
  • Ireland
  • July 14 2015

The High Court recently confirmed that insurers will not be limited to the initial reasons listed for declinature and may rely on misrepresentations made subsequently by an insured. The court found that a misrepresentation by an insured can be taken into consideration by the court, even if it arises subsequent to the initial claim being made and its initial refusal.

After-the-event insurance given amber light
Matheson
  • Ireland
  • June 16 2015

The Court of Appeal recently overturned a High Court ruling that the insolvent plaintiff's after-the-event (ATE) insurance could effectively substitute security for costs. The court accepted that an ATE insurance policy could provide security for costs in principle. However, it did not accept that the policy in question provided sufficient security. The decision was influenced by the existence of a condition precedent.

Majority of insurance complaints to Financial Services Ombudsman not upheld
Matheson
  • Ireland
  • May 12 2015

The latest Financial Services Ombudsman annual review has revealed that insurance complaints represented 44% of all consumer complaints filed in 2014. However, it is significant that 80% of these were not substantiated. Payment protection insurance continued to be a significant source of complaints.

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