Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I move amendment No. 40:

In page 11, to delete lines 29 to 37 and substitute the following: “(4) Without prejudice to any other duties in this section and to an insurer’s right to make the final determination in relation to a claim, the insurer shall be under a duty to—

(a) handle promptly and fairly any claim made in relation to the contract of insurance (a “claim”),

(b) where it is not made by the consumer himself or herself, notify a consumer of a claim as soon as practicable after the insurer is informed of the claim,

(c) engage with the consumer as regards a claim, and such engagement shall include providing an opportunity to the consumer to submit to the insurer relevant evidence which could inform the insurer’s determination as regards the claim,

(d) where a claim has been settled or otherwise disposed of, inform the consumer of the amount for which it has been settled or otherwise disposed of and the reason or reasons for its being settled or so disposed of.

(5) A reference in subsection (4)(d) to a claim being otherwise disposed of includes a reference to a claim being disposed of by reason of liability, against the insurer, being established in legal or arbitral proceedings in respect of the matter or matters concerned but where the claim is disposed of in that manner the duty under subsection (4)(d) to inform the consumer of the reason for its being so disposed of may be discharged by referring the consumer to the judgment or arbitral award concerned.

(6) In relation to any claim made in relation to a contract of insurance (whether by the consumer or a third party), an insurer shall not, for the purpose referred to in subsection (7), fail to engage in a meaningful manner with the consumer or third party as respects correspondence on the matter (with the insurer) of the consumer or third party.

(7) The purpose referred to in subsection (6) is to dissuade the consumer or third party from exercising contractual rights in respect of the claim.”.

All of these amendments, while in different sections, provide for better management and communication with consumers about their claims and clarify the duties on both sides. The primary purpose of amendment No. 40 to section 14 is to implement recommendation 8 of the motor insurance report and recommendation 10 of the employer and liability insurance report to ensure policyholders are notified of claims being made against their policy. In particular there is a requirement being made for insurers to engage with policyholders on a claim, including by giving them an opportunity to submit relevant evidence to the insurer in regard to the claim. There is also a requirement for the insurer to notify policyholders of the outcome of the claim, including the amount for which it has been settled. It is important to note that this proposal is made on the basis that it cannot prejudice the right of an insurer to make the ultimate determination on such matters.

Amendment No. 41 to section 14 deletes section 14(6) which states that insurers must pay consumers in a reasonable time as this is covered in more detail in the consumer protection code.

Amendment No. 42 is a new section 15 on the issue of insurers retaining claims. After section 14, I propose a new section 15, which aims to limit the issue of retention by insurers in property damage claims. This involves the practice of insurers withholding a percentage of a property claim until the repair has been fully completed and all invoices have been produced. It is proposed that, where an insurer wishes to include retention as a term of the contract, it will ensure the policyholder is made aware of this provision and informed of its application when a claim is submitted. It is further proposed to include limits to be applied to any retention amounts in a proportionate manner as follows. Where the insurer intends to apply a retention amount against a claim settlement offer, the insurer will not retain or withhold more than 5% of the claim settlement offer, where the claim settlement offer is below €20,000, or more than 10% of the claim settlement offer, where the claim settlement offer is €20,000 or above.

Amendment No. 43 proposes to remove section 15(1) about seeking damages if insurer withholds a claim.

Amendment No. 45 proposes to remove from section 15 a subsection about a consumer being excluded from requesting damages if there was fraud. Section 15(1) outlines that consumers may seek damages for consequential loss suffered as a result of any unreasonable delay in paying a claim or withholding payment of a claim. I propose that section 15(1) to be deleted in its entirety. It is not considered necessary and may cause more harm, as well as leading to increased litigation for no discernible justification. The term “unreasonable delay” is ambiguous and could be interpreted in different ways, which could result in disputes arising. This provision could give rise to an increase in complaints about insurers or an increase in policyholders seeking damages or both where there is a view that the payment of the claim is unreasonably delayed.