The Consumer Insurance Contracts Act 2019 (the “Act”), came into effect on September 1st, 2020 and reforms the law applicable to consumer insurance contracts. The main aim of the Act is to strengthen your rights and improve your protections as a consumer. The Act also amends our duties as an insurer and your duties as a consumer. RSA welcomes the changes brought about by the Act.
We have reviewed our policy wordings and documentation and are updating them to ensure that they are compliant with the Act. While your policy document may not yet contain these changes, we will be complying fully with all sections of the Act.
The changes come into effect in two phases; the first from 1st September 2020 and the second on 1st September 2021. We have outlined below the key changes for each effective date.
Who does the Act apply to?
The Act applies to consumers. A consumer is defined in the Financial Services Pensions Ombudsman Act 2017 and includes personal consumers and businesses with an annual turnover of €3m or less in the previous financial year. For RSA this means all of our private motor and household customers and some of our commercial customers.
Key Changes from 1st September 2020
- Where we alter the terms and conditions of your policy, we will notify you no later than 20 working days before your renewal date.
- Where we cancel your policy, we will refund you the balance of the premium, that you have paid, for the unexpired term of your contract.
- Cooling off period: Commercial customers who are consumers may cancel a contract of insurance by giving notice in writing to us within 14 working days from the date they have been informed that the contract has been concluded. When a contract is cancelled during the cooling off period we will only charge for the period you were on cover.
Duties in Relation to Claims
We will continue to handle your claims in compliance with the Central Bank of Ireland Consumer Protection Code 2012. However, if the Consumer Insurance Contacts Act applies to your policy, the following will also apply:
- We are under a duty to handle claims promptly and fairly, notify you of a third-party claim as soon as possible and inform you when a claim is settled or closed. We will continue to process claims quickly and fairly and to keep you informed throughout the process.
- The Act reminds you of your duty to report claims within a reasonable time and requires you to respond to reasonable requests for information in an honest and reasonably careful manner.
- Where it is not possible to quantify the total value of the claim within a reasonable time, but where part of the total value has been quantified, we will pay that part to you within a reasonable time.
- We will also disclose any information of which we become aware that supports or prejudices the validity of your claim and you will also be required to disclose such information to us.
- In the event of a claim, we will advise you of any policy conditions under which we are not obliged to pay the full amount of the claim unless and until repair, replacement or re-instatement works have been completed and any required documentation has been provided to us. Where such conditions apply, the amount of the “claim settlement amount” as defined by the Act, that we can defer are -
a) 5% of the claim settlement amount in a case in which the claim settlement amount is less than €40,000 or
b) 10% in a case in which the claim settlement amount is €40,000 or more.
- Where a claim contains information that is false or misleading and you know, or you consciously disregard whether it is false or misleading, we may refuse to pay the claim and we may cancel the contract of insurance.
- The Act also allows third parties to make a claim directly against your insurance policy where -
a) the person insured under a contract of insurance has died, cannot be found or is insolvent and
b) where the person insured under a contract of insurance lacks capacity or fails or refuses to communicate with the third-party who suffered injury or loss.
Key Changes from 1st September 2021
- From the 1st of September 2021 the onus will be on us to ask you all relevant questions when you are buying or renewing a policy.
- You are required to be honest and not hide any information that would affect the contract and we are required to do the same. You’re also required to answer any questions we ask you, honestly and with reasonable care. Where this has not happened, we may use one of the remedies available to us under the Consumer Insurance Contracts Act 2019 including, cancel the policy, reject a claim or limit the amount we pay in the event of a claim.
- You are not obliged to offer us any more information than we have asked for, however there are changes that you will need to tell us about if they occur as they may affect your policy e.g. if you build an extension onto your home or your business premises/if you modify your car etc. We will advise you of the changes that we need to be notified of before you enter into a contract with us.
5 years premium and 5 years claims information document
- From the 1st of September, as part of the renewal process, we will provide you with a list of claims on your policy in the previous 5 years (or for less than 5 years where you have held a policy with us for a shorter period).
- As part of the renewal process we will also provide you with your previous 5 years premium or an annualised version of your premium if you made a change to your policy within any year.
If you require more information, a full copy of the Act is available at www.oireachtas.ie