Insurance Contracts CP - Law Reform Commission

of a promissory warranty, it should be reviewed in terms of whether it is an unfair term within the meaning
of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995. [Paragraph 5.98]
Chapter 6 – Exclusions and Unfair Terms
11.29 The Commission provisionally recommends that legislation be enacted to provide that an
insurance contract should be subject to a good faith requirement, namely that if reliance on a term in an
insurance contract would constitute a failure to act with the utmost good faith the party may not rely on
that term. [Paragraph 6.08]
11.30 The Commission provisionally recommends that there should be a statutory duty on an insurer
to draw attention to unusual terms. [Paragraph 6.10]
11.31 The Commission provisionally recommends that Regulation 4 of the European Communities
(Unfair Terms in Consumer Contracts) Regulations 1995 (which deals with specific circumstances in
which a contract term shall not of itself be considered to be unfair) should be clarified in the context of
insurance contracts so that it is provided, to avoid any doubt, that: (a) a term in an insurance contract
shall not in itself be regarded as unfair where the subject matter of the term has actually been considered
by the insurer in the calculation of the premium (price); (b) that this has been drawn to the attention of the
proposer; and (c) that this clarification to Regulation 4 should apply to consumers as defined for the
purposes of the jurisdiction of the Financial Services Ombudsman, namely natural persons and
businesses with an annual turnover not exceeding €3 million. [Paragraph 6.46]
Chapter 7 – Formalities
11.32 The Commission provisionally recommends that legislation should provide that it is not a
necessary pre-condition to the validity of an insurance contract that it be in writing. The contract may be
proved by any means, including oral testimony. [Paragraph 7.40]
11.33 The Commission provisionally recommends that, subject to a cooling-off period (if any), the
insurer should transmit the insurance policy document to the insured within 15 working days of the
contract being agreed. [Paragraph 7.43]
11.34 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. [Paragraph 7.50]
Chapter 8 – The Duty of Utmost Good Faith – Post Contractual Aspects
11.35 The Commission provisionally recommends that the law should continue to provide that an
insured should be prohibited from recovering on a claim by submitting a fraudulent claim or fraudulent
evidence to support a claim; but that it should also provide that an innocent co-insured or beneficiary may
recover on a proportionate basis; provided that the fraudulent insured cannot benefit from the policy.
[Paragraph 8.50]
11.36 The Commission provisionally recommends that legislation should set out the mutual duties on
the insured and the insurer in respect of claims handling, so that the principle of good faith would then
remain relevant only to pre-contractual formation of the contract and as an aid to interpretation.
[Paragraph 8.68]
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