Lobbying by insurers blamed for delay in commencing new law
LOBBYING by the insurance industry has been blamed for the delay in implementing new legislation which would make it much more difficult for insurers to avoid paying out on claims.
The Consumer Insurance Contracts Act has been described as the most radical shake-up of consumer legislation in centuries.
But insurers have threatened to withdraw insurance products if it is enacted.
Changes under the Consumer Insurance Contracts Act include limiting the ability of insurers to retain part of a settlement. It also puts the onus on insurers to ask relevant questions when consumers are taking out a policy.
The Alliance for Insurance Reform said the legislation would alter the balance of power between insurers and policyholders, such as consumers, small firms and community groups.
The bill was signed into law by President Michael D Higgins on St Stephen’s Day, but it has not been commenced by Finance Minister Paschal Donohoe.
In a Dáil reply to independent TD Noel Grealish, Mr Donohoe said the insurance industry has told his officials they need more time to implement the provisions of the act.
If they did not get more time “they may be forced to withdraw certain products from the market in order to prioritise others so as to ensure that they are fully compliant with the law”.
He added: “Officials understand that such a development would most likely impact the employer/ public liability part of the market.”
The minister said that after consulting with the insurance industry, he would not be commencing the legislation. He said it was for the next Government to implement the legislation.
But Sinn Féin finance spokesman Pearse Doherty, who introduced the legislation three years ago, said he could not believe the minister has admitted that lobbying by insurers has prompted him to delay implementing the legislation.
Mr Doherty said insurers have had more than enough time to prepare for the changes.
Publicans would not have been forced to take court actions against FBD for business interruption pay-outs if the legislation was in force, he said.
The Alliance for Insurance Reform said the delay in commencing the legislation was “a clear victory for the insurance industry lobby”.
Insurance Ireland has insisted it supports the legislation. But it wants the next Government to create an operational management group to oversee its implementation.
Insurance companies threaten to withdraw products from market