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

I move amendment No. 17:

In page 15, line 28, to delete “consumer”.

Section 18 sets out to remove the potential of abuse by insurers of the use of warranties in insurance contracts. In the past, a breach of warranty allowed insurers to avoid liability, no matter how minor the breach or even where it was not material to the insured risk. The best example is if there is a requirement for a burglar alarm on a property but it does not have one. If the house goes on fire, in those circumstances the insurance company has the opportunity of avoiding liability because there was a breach of the actual circumstances.

Legal counsel has reviewed the section and concluded its provisions appear to cover in broad terms what they are intended to achieve. Legal counsel, however, recommended that "continuing restrictive condition" should be defined. An amendment to section 1 included such a definition on this basis.

Legal counsel also recommended the section be strengthened. It observes section 18(4) provides that an insurer’s liability is suspended when there is a breach of a continuing restrictive condition, and that if the breach is remedied before the time the event occurs, an insurer’s liability should not be suspended. However, section 18(4) makes no reference to the fact that an insurer’s liability should not be suspended when the breach that has occurred is unrelated to the event or risk for which a claim is being made.

Amendment No. 20 is a technical change to facilitate amendment No. 21. Amendment No. 21 is designed to make it clear that if there is a breach in a continuing restrictive condition, an insurer’s liability should only be suspended when the breach is associated with the loss occurred. For example, an insurer should not refuse to pay out in the event of a house burning down, if the house alarm was not applied, as the house alarm is not connected to the fire which occurred.

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