Seanad debates

Wednesday, 11 December 2019

Consumer Insurance Contracts Bill 2017: Committee and Remaining Stages

 

10:30 am

Photo of Rose Conway WalshRose Conway Walsh (Sinn Fein) | Oireachtas source

The Senator opposes section 7 because of the concerns expressed by Deputy Penrose during Report Stage in the Dáil. The section, which relates to insurable interests, reflects recommendations made by the LRC that discussed in great detail the issues surrounding insurable interests and whether they should be reformed or abolished. As it stand, claims can be rejected by the insurance industry if the claimant is deemed not to have an interest in the subject matter of an otherwise valid contract. This section removes the ability of companies to reject claims solely on that basis. It also caters for those requiring an interest when a claim is made, while limiting this interest in order that it does not extend beyond an expectation of the economic benefits or losses that would arise.

I will address some of the concerns raised by Senator Bacik and Deputy Penrose. The report by the LRC was instructive in this respect. First, there is already an exception to the insurable interests for a person taking out an insurance policy on the life of their spouse, civil partner, cohabitee, or any other family member, on the understanding that they are likely to gain on each other's lives. The law assumes that in the event of the death of a public or civil servant, the entitlement of a widow, widower, or child does not create incentives for them to claim on the lives of those public or civil servants. Second, the Married Women's Status Act 1957 provides another exception to insurable interests for children and wives who are intended to benefit from a life insurance policy. Under this legislation, the definition of a "child" includes stepchildren, adopted children and those to whom the insured is considered in loco parentis. The law, again, assumes that these provisions do not create some of the perverse incentives that have been previously raised. Third, in every other jurisdiction where the reform or abolishment of insurable interests has been considered, that reform has resulted in an expanded list of persons in whom the insured is considered to have an insurable interest, including children. I refer the Senator to the reforms proposed by the English and Scottish law commissions, which would expand this list even further to include pension trustees, for example. A claim can be refused under any insurance policy, not only if it involves fraud but also if the claimant has been involved in any wrongdoing, including the crimes to which Deputy Penrose referred. The Bill provides that when a claim is made under a policy, including life insurance policies, the claimant must establish the loss. The provisions of this Bill and related legislation are sufficiently robust to address the concerns that have been expressed. For that reason, Sinn Féin opposes the amendment of this section.

Comments

No comments

Log in or join to post a public comment.