Insurance Contracts CP - Law Reform Commission

writing within 2 months of the fraud becoming known to the insurer. 47 Protection against unilaterally
imposed changes in respect of an application for cover and the policy document are also provided via a
requirement that differences in the policy should be both highlighted in the policy and by notice in bold
print of the right to object to changes. 48 A general duty to provide a policyholder with information, without
undue delay, of all matters relevant to the performance of the contract requires that the policyholder‘s
request, and the information in question, must be in writing. 49 Termination rights for non-compliance with
precautionary measures must also be effected via a written notice to the policyholder within one month of
non-compliance becoming known to the insured 50 and termination for non payment of premiums also
contain invoicing and documentation rights under PEICL, Article 5, and notice of an insured event
occurring also envisage notice within a stated and reasonable period of time, not being shorter than 5
days. 51
7.49 The Commission considers that these extremely detailed rules are too prescriptive and would
not favour their adoption other than in the form of best practice guidelines. The Commission would favour
less prescriptive rules and takes note of the existing consumer protection legislation, in particular, the
European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004 52 .
Schedule 1 and 2 of the 2004 Regulations provide comprehensive lists of what information and notices
must be given to a consumer before entering into a distance contract for the supply of financial services.
While it may be necessary to tailor these regulations to address specific issues that arise in relation to
insurance contracts, they do provide useful and clear guidance for any proposed legislation governing
insurance contracts.
7.50 The Commission provisionally recommends that legislation should provide that insurance
contracts be subject to prescribed requirements of notices, notification and forms that are comparable to
those already found in existing consumer protection legislation, such as the European Communities
(Distance Marketing of Consumer Financial Services) Regulations 2004. The Commission also
provisionally recommends that legislation should include a statutory duty on insurers to provide a
proposer with the prescribed requirements of notices, notification and forms. The Commission invites
submissions on the precise nature and content of such prescribed requirements.
(5) How Information is to be provided
7.51 Irish law is also not very clear in relation to prescriptive rules on the presentation of information,
as distinct from detailing what must be disclosed. 53 The Financial Regulator‘s Consumer Code does have
a number of provisions requiring, for example, information to consumers to be ―of a print size that is
clearly legible. 54 The Code requires that insurance warranties and endorsements set out in quotation
documents ―must not be detailed in smaller print than other information provided in the documents‖.
7.52 The Commission considers that the question of how consumers are informed about the policy
under negotiation is of critical importance. In this regard, the work of the Australian Law Reform
Commission, undertaken nearly 30 years ago, remains important. While the ALRC ultimately decided
against prescribing binding rules on print size, legibility, and plain English in the draft Insurance Act, the
ALRC did suggest that a standard of legibility ―should be prescribed by regulation‖. 55 The Report also
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PEICL, Article 2:104.
PEICL, Article 2:502(1).
PEICL, Article 2:702(2).
PEICL, Article 2:102(2).
PEICL, Article 2:101(1). This does not involve documentary notice but the ―stated‖ element suggests some
contractual agreement on such a key point.
SI No. 853 of 2004
Insurance Act 1936, s.61: Sale of Goods and Supply of Services Act 1980, s.52(1).
Whether illegibility can vitiate a policy term was considered in Koskas v Standard Marine Insurance Co (1926)
25 U.L. Rep. 363. The case is inconclusive on the point.
Report No. 20, Insurance Contracts para. 38.
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