Insurance Contracts CP - Law Reform Commission

D
Regulation and Supervision of Insurance: pre-1922 Legislation
4. Ellis and Wiltshire 5 observe that ―Government supervision of insurance companies in Ireland
dates from the Life Assurance Companies Act 1870.‖ The 1870 Act required the deposit of £20,000 with
the Accountant General of the Court of Chancery, a requirement to keep life funds separate from other
business transacted by companies engaging in life assurance, as well as the preparation and filing of
annual accounts of life and other assurance business. The Assurance Companies Act 1909 repealed the
1870 Act and extended the regulatory structure in relation to life assurance into fire insurance, accident
insurance, employer‘s liability and bond investment business, insofar as that business was not already
the subject of a friendly society or trade union registration. The 1909 Act did not address industrial life
assurance, that is, the activities of friendly societies and life assurance entities that granted life assurance
via a mechanism for collecting premiums through collectors at periodical intervals of less than two
months. The legislation in this area was consolidated in the Friendly Societies Act 1896 6 and the
Collecting Societies and Industrial Assurance Companies Act 1896. 7 This was the key legislation in force
in 1922 when the State was established.
E
Regulation and Supervision of Insurance during the 20 th Century
5. The Oireachtas first made provision in respect of motor insurance in the Road Traffic Act 1933,
but it was the Insurance Act 1936 that ushered in general licensing and deposit-making requirements for
Irish companies wishing to transact business in ordinary and industrial life assurance, fire, bond,
employer‘s liability, motor insurance, public liability, engineering, glass, guarantee and burglary insurance.
Ellis and Wiltshire comment that, following the enactment of the 1936 Act, ―it became almost impossible
for foreign companies to enter the Irish market.‖ 8 Although a ―reciprocity provision‖ was contained in the
Insurance Act 1953 so as to facilitate limited entry to the Irish market by foreign companies, it was only
through the market liberalisation provision of the EU regulatory regime (introduced from the 1970s
onwards) that Irish insurance regulation lost its protectionist character. In addition to the 1936 Act, the
other main legislative measures have been the Insurance Act 1989, the Investment Intermediaries Act
1995, and the Insurance Act 2000.
F
Regulation and Supervision of Insurance: the EU influence
6. These Acts have been supplemented by a significant number of Life Insurance Regulations and
Non-Life Insurance Regulations made under the European Communities Act 1972 that have sought to
implement requirements under various EU Insurance Directives. Together with the Acts already
mentioned, these have enhanced the rules by which insurers are supervised, improving transparency
requirements relating to insurers and intermediaries, as well as bringing intermediaries into a more
rigorous regulatory environment.
7. The regulatory significance of EU law in this area is also illustrated by its impact in the health
insurance area. The monopoly afforded by the Voluntary Health Insurance Act 1957 to the State-owned
Voluntary Health Insurance Board (VHI) was modified by subsequent legislation and thus facilitated the
entry into the Irish market of private sector competitors. The European Court of Justice has ruled,
however, in European Commisison v Ireland, 9 that the State has failed to comply with the provisions in
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Ellis and Wiltshire, Regulation of Insurance in the UK, Ireland and the EU (Thomson Reuters Looseleaf) C.1-
01.
59 & 60 Vict. c.25. The Friendly Societies Act 1896, as amended, remains in force in Ireland.
59 & 60 Vict. c.26.
Ellis and Wiltshire, Regulation of Insurance in the UK, Ireland and the EU (Thomson Reuters Looseleaf) C.1-
01.
Case C-82/10, Judgment of the Court (Fourth Chamber), 29 September 2011. Legislation modifying the 1957
Act was enacted in 1996, 1998, 2001 and 2008. The Court in particular did not accept that the enactment of
the Voluntary Health Insurance Act 2008 (which has not been brought into force, as required, by a ministerial
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