The Consumer Protection Code applies to insurance in common with other consumer financial services. Insurance brokers are subject to much the same regulation and requirements as other financial and investment intermediaries.
An insurance intermediary must lodge money it receives in respect of a premium in a segregated client premium account. It must operate separate accounts for life and non-life business. It must ensure that all payments from a client premium account state that the payment emanated from it.
The client premium account must never be overdrawn. The debits and credits permissible on the account are set out in the Code. They are limited to payments in the context of intermediation between client and insurer.
An insurance intermediary must undertake a reconciliation of amounts due to regulated entities, with the balance on each client\’s premium account which it operates.
A regulated person who provides an insurance quotation to a consumer must include the following information in the quotation, assuming that all details provided by the consumer are correct and do not change;
- the monetary amount of the quotation;
- the time for which it is valid;
- the legal name of the underwriter;
- any warranties and endorsements that apply to the policy;
- details of any discounts or loading that have been applied in the generation of the quotation.
Where the quotation is provided on paper or another durable medium, this information must not be smaller than the font size of the other information provided in the document.
Insurers Disclosures I
A regulated entity must, when offering a motor insurance policy to a consumer, clearly set out for the consumer, the basis on which the insurance undertaking may calculate the value of the vehicle for the purpose of settling of a claim, where the vehicle is deemed beyond the economic repair following an accident, theft or fire.
A regulated entity must set out the legal name of the relevant underwriter on all insurance policy documents and renewal notices, issued to the consumer.
A regulated entity must explain to the consumer at the proposal stage, the consequences for the consumer in failing to make full disclosure of relevant facts, including the consumer\’s medical details or history and previous claims made by the consumer for the type of insurance sought.
The explanation must include where relevant, that the policy may be cancelled, that claims may not be paid, the difficulties the consumer may encounter in trying to purchase insurance elsewhere and in the case of property insurance, that a failure to have property insurance could lead to the breach of mortgage terms and conditions.
Insurers Disclosures II
Prior to a consumer completing a proposal form for permanent health insurance, a regulated entity must explain to the consumer,
- the meaning of disability as defined in the policy;
- the benefits available;
- the exclusions and reductions applicable to the benefit where there are disability payments from other sources.
Prior to the consumer completing a proposal form for serious illness policy, a regulated entity must explain clearly to the consumer, the restrictions, conditions and other exclusions that apply to the policy.
When offering a property or motor insurance policy to a consumer, a regulated entity must where relevant, explain to the consumer that in the event of a claim, that it may appoint its own contractor to undertake building or repair work on the motor vehicle, as the case may be.
Where an insurance undertaking refuses to quote a consumer for motor or property insurance, it must be within five days of the refusal,
- in the case of motor insurance, provide the consumer with its refusal and reasons for refusal and cover on paper or other durable medium and notify the consumer of his or her rights to refer the matter to the declined cases committee and the method for doing so
- in the case of property insurance, inform the consumer of its refusal and the reasons for refusing cover and notify the consumer the failure to have property insurance can lead to a breach of mortgage loan conditions and
- inform the consumer that he can request the information be provided on paper or in another durable medium, and must provide this information if requested.
Insurers Disclosures III
Prior to arranging, recommending or providing an insurance policy where the premium may be subject to review by the insurance undertaking during the term of the policy, a regulated entity must explain clearly to the consumer the risk that the premium may increase. It must provide the consumer with details of the period for which the initial premium is fixed. A warning is required to the effect that the premium may or will increase after that term. This does not apply where the premium may be subject to review as a result of an alteration requested by the consumer.
Prior to the sale of a non-life insurance product, the insurance intermediary must
- disclose in general terms to the consumer that it is paid for the service by means for a remuneration agreement with the product producer
- inform the consumer of the amount of remuneration available in respect of that service or that details are available on request
- disclose in general terms, any remuneration arrangements with product providers that are not directly attributed to the service provided to the individual consumer, but are based on levels of business introduced by the intermediary to that producer or that may be perceived as having the potential greater conflict of interest.
The above disclosure must be contained in the terms of business or through some other mechanism and included with renewal notices.
Where the statement of suitability is required in respect of insurance (as is the case with most insurance products and other financial services), the customer\’s needs must be ascertained and a statement of suitability must be furnished.
An insurance undertaking must issue policy documents within five business days of all relevant information being provided by the consumer and cover being underwritten, directly to any policyholder to whom it has sold its insurance product, or to an insurance intermediary that has sold the policy. The intermediary must within five days of receiving the policy documents, provide them for the consumer. Similar provisions apply where the customer renews its policy.
When an insurer notifies a regulated entity of his intention to use an insured vehicle in another member state of the EU, the regulated entity must provide the contact details for the regulated entity’s appointed claims representative in that member state.
Where a secondary market exists for a life insurance policy and the policyholder is a consumer who seeks information on its early surrender, the regulated entity must notify the consumer at the same time that it discloses the surrender value of the policy, that the secondary market exists and that the policy may be sold in it.
A regulated entity must issue a premium rebate to a consumer within five business days of the premium rebate becoming due where it is more than €10. Where the entity is an insurance undertaking, it becomes due as soon as the undertaking becomes aware of the circumstances giving rise to the premium rebate.
Where the entity is an insurance intermediary, the rebate becomes due when the insurance intermediary has received the premium from the insurance undertaking or the insurance undertaking has notified the intermediary that this rebate is due and permits it to issue the rebate from funds held by it or due to the insurance undertaking.
Where the rebate is due is less than €10, different rules apply. The consumer is given the choice of receiving the rebate by way of a reduction in the next renewal premium or donating the sum to charity.
An insurance intermediary may handle premium rebates due to a consumer, only where an express agreement exists that the intermediary acts as agent of the regulated entity in passing the rebates to the consumer. The intermediary must transfer the rebate to the consumer in full. Any charges that the consumer may owe to the intermediary may not be recovered without the prior written agreement of the consumer in each case. A record of such agreement must be maintained by the intermediary.
Where an insurance intermediary has issued the rebate by cheque to a consumer which has still not been presented within six months, the intermediary must return the rebate to the insurer. If the consumer seeks the rebate in the future, it must be issued by the undertaking or by the intermediary in accordance with the above provisions.
Regulated entities must have written procedures for making claims. Where an accident has occurred and a personal injury has been suffered, a copy of a PIAB claimant information leaflet is to be issued as soon as the claim is notified. Where the potential claimant has been involved in a motor accident with a non-insured, unidentified or foreign registered vehicle, the entity must advise the potential claimant to contact the Motor Insurance Bureau of Ireland.
Where a completed claim form is required, the form must be issued within five business days of receiving notice of the claim. The regulated entity must offer and assistance in the process of making the claim, including alerting the claimant of terms and conditions which may be of benefit to the claimant. A record must be kept of all conversations.
Updates of developments affecting the outcome of the claim must be furnished within 10 business days. Where additional documentation is required, the claimant must be advised as soon as necessary on paper or in another durable medium.
An insurance intermediary who assists a consumer in making a claim must on receipt of the claims documents, transmit the same to the relevant insurer or other entity, within one business day.
In the case of motor insurance or property insurance claims and other claims where relevant, the regulated entity must notify the claimant that the claimant may appoint a loss assessor to act in his interest, but that any such appointment will be at the claimant\’s expense. The regulated entity must make a record of the notification.
Where an insurance undertaking appoints a third party to undertake restitution work in respect of a claim, it must provide the claimant in advance on paper or in another durable medium with the details of the scope of the work that has been approved and its costs.
Where a method of direct settlement has been used, the regulated entity must not ask the claimant to certify the restitution work carried by a third party appointed by the insurer. It must certify on paper or in another durable medium to the claimant, that the restitution work carried out by the third party appointed, has been carried out to restore the claimant\’s property to at least to the standard that existed prior to the insured event.
A regulated entity must ensure that any settlement offer made to the claimant is fair, taking account of any relevant factors represents. It must be the regulated entity’ best estimate of the claimant\’s reasonable entitlement under the policy.
A regulated entity must within 10 business days of making a decision in respect of a claim, inform the claimant on paper or in another durable medium of the outcome of the investigation, explaining the terms of any offer or settlement. On making an offer of settlement, the regulated entity must ensure that the following conditions are satisfied
- that the insured event has been proven or accepted by the regulated entity;
- that specified documentation has been received by the regulated entity from the claimant; and
- the entitlement of the claimant to receive the payment has been established.
A regulated entity must allow a claimant at least 10 business days to accept or reject the offer. If the claimant waives his rights and accepts the settlement offer within that timeframe, the entity must record the decision and maintain a record. This does not apply to the surrender or encashment of life assurance investment policies or life insurance protection policies, where the monies due are set out in the policy terms and conditions or schedule.
Where a claimant has agreed to accept an offer made by the regulated entity to settle a claim, the entity must discharge the claim within 10 business days from the agreement to accept the offer. The appropriate amount may be agreed subject to finalisation of legal costs, if applicable. Where a method of direct settlement has applied, the regulated entity must discharge the claim without delay.
Where the regulated entity decides to decline the claim, the reasons for the decision must be provided to the claimant on paper or in another durable medium. The entity must provide the claimant with written details of any internal appeals mechanism available to the claimant.
Where the policyholder is a consumer and is not beneficiary of the settlement, the policyholder must be advised on paper or in another durable medium by the regulated entity at time the settlement is made, of the final outcome of the claim including details of the settlement. Where applicable, the policyholder must be informed that the settlement of the claim will affect future insurance contracts of that type.