New laws that will enhance the rights of consumers and businesses when they are taking out insurance policies come into effect today.
The changes include a new 14 day cooling off period for customers signing up to certain new insurance contracts.
Insurers will also no longer be able to settle third party claims without the policyholder knowing and will have to engage with the customer on the claim, including giving them an opportunity to submit relevant evidence.
The insurance company will also have to notify policyholders of the outcome of the claim including the amount that it has been settled for.
It will also no longer be possible for an insurance company to reject a claim on the basis that a claimant is not considered to have or have had an insurable interest in the subject of the contract.
The laws also put a limit on the amount of a claim settlement offer that an insurer can retain or withhold until repairs have been completed or invoices produced.
The Consumer Insurance Contracts Act was signed into law in January, but only now are the first parts of it coming into force.
This is because the insurance industry sought more time to implement the provisions of the act.
The remainder of the act will not start until this time next year.
Among these measures will be a requirement for the insurer to ask the relevant questions when a consumer or business takes out a policy, reversing the current status quo which places the burden and responsibility on the consumer to volunteer information.
Insurance companies will also have to inform customers what they paid in premiums over the past five years, as well as any claims paid to customers and third parties over the same period.
The laws will also make it harder for an insurer to avoid paying valid claims on grounds that have nothing to do with the accident or loss incurred by the policyholder.
The legislation was first introduced to the Dáil by Sinn Féin's finance spokesman, Pearse Doherty, over three years ago.
But it took until last December for it pass all stages in the Oireachtas.
Mr Doherty and those campaigning for insurance reform have criticised the Minister for Finance's decision not to commence some parts of the legislation until next year, saying reform is neeeded now.
