Repeal of 1774 law on cards under reform proposal
In a consultation paper published yesterday, it made over 40 suggestions for reform, among them the development of statutory codes of practice and replacing the current duty onthe insured person to give “true” answers with a duty to answer specific questions honestly and carefully.
It also seeks to replace the practice of total repudiation of a contract by insurance companies with proportional damages in the event of misinformation by a client.
In a statement, the commission said it considered that under current law there was an excessive emphasis on repudiation of liability under an insurance policy as a remedy for the insurer.
“The commission has, accordingly, provisionally concluded that repudiation should no longer be the main remedy, and that in cases of non-disclosure and misrepresentation the principal remedy should be one of damages in proportion to the failure by the insured.”
The commission also “provisionally recommends the repeal of the Life Assurance Act 1774, as extended to Ireland by the Life Insurance (Ireland) Act 1866”.
The paper’s detailed recommendations include:
* Regulatory bodies should… develop comprehensive statutory codes of practice setting out standards of best practice.
* In any litigation or dispute resolution process, such codes of practice should be admissible in evidence.
* Legislation should provide that an otherwise valid insurance claim cannot be rejected by the insurer solely because the insured lacks an “insurable interest” as it has been traditionally defined.
* The pre-contractual duty of disclosure in insurance contract law should be retained, but it should be restricted to facts or circumstances of which the person applying for insurance cover has actual knowledge.
* The current duty on the proposer/insured to give “true” answers should be replaced by a duty to answer specific questions honestly and carefully.
The commission also considers that the insurer must ensure that any question posed in writing to the proposer/insured is drafted in plain, intelligible language.
