A new bill which will reform insurance contracts in favour of the consumer has been brought a step forward today.
The Consumer Insurance Contracts Bill, which was introduced by Donegal Deputy Pearse Doherty in 2017, has passed Committee Stage in the Finance Committee.
The legislation would modernise insurance contracts and prevent insurance companies refusing a claim when it has not received a full and complete disclosure from the customer, even in a situation where if this information had been disclosed, it would have had minimal or no impact on the decision to provide cover in the first place.
Sinn Féin Deputy Doherty has welcomed today’s progress on his “pro-consumer and pro-transparency” Bill and hopes to see it on the statute book as soon as possible.
He said: “My Bill replaces the one sided nature of contracts by putting a duty on the insurer to ask for all information it considers relevant. The onus is shifted onto the insurer to ask the right questions rather than on the consumers to guess which information they should provide.
“The consumer is of course required to answer honestly and fully.
“In cases where there is a lack of full disclosure the Bill allows for a partial payment to be paid rather than the situation before when the insurer could simply refuse all payment.
“In another important step policy holders will have to be notified of claims made against them.”
Deputy Doherty added that the Bill also empowers the consumer by ending the strict ability of an insurer to not pay out because of conditions to the contract that have no bearing to the insurable event.
He gave an example: “Currently as the law stands if your house burns down but your burglar alarm is broke then the insurer can avoid, in theory, paying out because you are deemed to have broken the contract which stipulated conditions about the alarm.
“The Bill would change the law so that such irrelevant things are not grounds for avoiding the paying of compensation. The small print conditions should not be used as an excuse anymore.”
Deputy Doherty concluded: “This Sinn Féin Bill is about levelling the playing field and closing down the loopholes insurers can squirm through. I hope to see the Bill on the statute book as soon as possible.”