Consumer Insurance Contracts Act 2019

Pre-contractual duties of consumer and insurer

8. (1) The duties in this section replace, at the pre-contractual stage of a contract of insurance, the principle of utmost good faith (uberrima fides) and any duty of disclosure of a consumer (including any duty on the consumer to volunteer information) that applied prior to the commencement of this section (whether that principle or duty arose at common law or under an enactment).

(2) The pre-contractual duty of disclosure of a consumer is confined to providing responses to questions asked by the insurer, and the consumer shall not be under any duty to volunteer any information over and above that required by such questions.

(3) Where the insurer requests the consumer at the pre-contractual stage to provide information to the insurer, the insurer shall be under a duty to ask specific questions, on paper or on another durable medium, and shall not use general questions.

(4) It shall be presumed, unless the contrary is shown, that the consumer knows that a matter about which the insurer asks a specific question is material to the risk undertaken by that insurer or the calculation of the premium by that insurer, or both.

(5) (a) Where the insurer asks questions these shall be drafted in plain and intelligible language, and the onus of proving that the questions are plain and intelligible shall rest with the insurer.

(b) Where there is an ambiguity or a doubt about the meaning of a question the interpretation most favourable to the consumer shall prevail.

(6) An insurer may use the remedies available under this Act (including the remedy to repudiate liability or to limit the amount paid on foot of the contract of insurance) only if it establishes that non-disclosure of material information was an effective cause of the insurer entering into the relevant contract of insurance and on the terms on which it did.

(7) (a) The consumer shall be under a duty to answer all questions posed by the insurer honestly and with reasonable care (the test of reasonable care being by reference to that of the average consumer).

(b) In determining whether the consumer has complied with this duty, regard shall be had to, amongst other matters, the following:

(i) the type of insurance contract in question and its target market;

(ii) any relevant explanatory material or publicity produced or authorised by the insurer;

(iii) how clear and specific are the insurer’s questions;

(iv) whether the consumer is represented by an agent and the circumstances of that representation; and

(v) that some consumers can be expected to be in possession of more information than others.

(8) The test of what is material, and consequently the scope of questions that the insurer may ask the consumer, are without prejudice to—

(a) the requirements of the Data Protection Acts 1988 to 2018, and

(b) the provisions of the Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016 .

(9) Every insurer shall, before a contract of insurance is entered into, or renewed, inform the consumer on paper or on another durable medium of the general nature and effect of the pre-contractual duty of disclosure.

(10) (a) An insurer shall be deemed to have waived any further duty of disclosure of the consumer where it fails to investigate an absent or obviously incomplete answer to a question.

(b) The waiver in paragraph (a) does not apply where the non-disclosure arises from fraudulent, intentional or reckless concealment.