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

I move amendment No. 10:

In page 10, lines 27 to 36, to delete all words from and including "(1) Subject" in line 27 down to and including line 36 and substitute the following: "(1) Subject to subsection (3), in a case in which the consumer’s entitlement to cancel a contract of insurance is not governed by the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015) or the European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004 (S.I. No. 853 of 2004), a consumer may cancel a contract of insurance, by giving notice in writing of cancellation to the insurer, within 14 working days after the date when the consumer is informed that the contract has been concluded.

(2) The giving of notice of cancellation by a person shall have the effect of releasing the person from any further obligation arising from the contract.

(3) The right to cancel a contract of insurance under subsection (1)does not apply where the duration of the contract is less than one month.".

It is important to be aware that the bulk of insurance policies are covered by cancellation or cooling-off periods. For instance, all life policies are covered by the solvency II regulations and distance marketing regulations while cross-border non-life policies are also covered by the distance marketing regulations. The original proposal, therefore, from the LRC covering all life and non-life policies is not required and would be in conflict with aspects of the above maximum harmonisation regulations. Consequently, it was proposed to confine section 11(1) to face to face non-life contracts of insurance, that is, those areas that currently have no cooling-off period option. This approach avoids legislative duplication and more important prevents any conflict with EU law.

Section 11(2) sets out various scenarios where the right to cancel a contract does not apply. My officials have engaged with the Central Bank on this provision and I have been advised that in respect of subsection (b), when a contract is renewed on the same terms and conditions, it is a new contract and, therefore, a cooling-off period is also necessary in this case. Otherwise we weaken the rights of policyholders. With regard to subsection (c), the bank has advised that this provision is not aligned with existing EU law and its inclusion is likely to create more uncertainty than anything else as, for instance, preliminary insurance is not relevant in an Irish context.

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