Insurance Contracts CP - Law Reform Commission

1.49 Before leaving the general issue of how European law and developments within the EU may
impact on insurance law and practice in Ireland, it is useful to note that the ECJ may, from time to time,
provide rulings that will constrain the freedom of ―the Market‖ to set contractual terms. The highly
controversial 2011 decision of the Court in Association Belge des Consommateurs Test-Achats ASBL v
Charles Basselier 59 makes it clear that even if actuarial factors can justify using gender as a basis for
fixing a premium, Community law may invalidate such practices. The narrow view of this case is that a
limited derogation in Belgian legislation was incompatible with the principle of equality as between men
and women on the basis that the derogation permitted in Directive 2004/113/EC was transitional whereas
the Belgian legislation was unlimited in duration. The opinion of Advocate General Kokott addressed
wider concerns, highlighting the fact that society will not permit differential premiums to be charged in
relation to race, even if actuarial or statistical data would justify such distinctions from being drawn. As
insurance involves a system whereby risks are pooled with the consequence that the unfit or unhealthy
are subsidised in relation to health insurance by the rest of the population, public policy requires a general
shift towards unisex premiums in certain categories of insurance. These issues were explored by the
United States Supreme Court in their landmark 1978 decision in City of Los Angeles Department of Water
and Power v Manhart 60 :this decision broadly corresponds with the same process of reasoning and
outcome demonstrated by the ECJ in its 2011 Charles Basselier decision.
D
New Legal Norms and forms of Dispute Resolution
(1) The adjudications of the Insurance Ombudsman 1992-1998
1.50 Between 1992 and 1998, the then Insurance Ombudsman of Ireland, Paulyn Marrinan Quinn,
produced a number of adjudications and settlements that provide extremely valuable insights into how an
effective system of alternative dispute resolution may be allowed to develop outside of the court system.
In the collected decisions for the period in question, the Ombudsman (while noting that the method of
dispute resolution adopted by her office was inquisitorial in nature) stressed that the results of the
Insurance Ombudsman‘s adjudications are to be ―fair and reasonable in the circumstances.‖ 61 However,
the Insurance Ombudsman also placed an emphasis on the need to ensure that:
―like cases should be treated as alike and be determined on similar principles. Consistency is
exercising judgment and discretion has been my stated aim, from the onset, and of course, this
requires awareness of previous decisions as well as the development of the principles,
practices and jurisprudence over time‖. 62
1.51 It is clear that in developing this jurisprudence, the Insurance Ombudsman was in many
situations being guided by the decisions of the High Court and Supreme Court, with decisions such as
Kelleher, Aro Road and Fagan being cited and applied insofar as judicial statements could provide
guidance to the Insurance Ombudsman. References to Principles of Good Insurance Practice also
informed many of the adjudications (and settlements) made during this period. It appears to the
Commission that the jurisprudence of the Insurance Ombudsman in this six year period strikes a very
good balance between the traditional approach taken by the courts to issues of pre contractual disclosure
and information gathering exercises, and the more nuanced requirements of consumer protection
principles.
1.52 While the details of the more important adjudications of the Insurance Ombudsman will be
considered more fully later in this Consultation Paper, the Commission would like to make the following
observations on how the Insurance Ombudsman applied the relevant legal principles in the 1992-1998
period:
59
60
61
62
Case C-236/09, judgment of 1 March 2011.
435 US 702 (1998). The Supreme Court struck down contribution differentials in an employee pension plan
requiring female workers to contribute more towards retirement on the basis that female employees enjoyed
grater longevity and thus cost the pension fund more than in the case of male workers.
Insurance Ombudsman of Ireland Digest of Cases 1992-1998 (―Digest‖).
See Mission Statement at p.v of Digest.
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