Important Communication - Consumer Insurance Contracts Act (2019)
Dear Broker,
During this challenging period, we have continued to keep you updated on relevant business issues and developments through virtual meetings, webinars and other forms of online communications. We maintain a strong appetite and desire to deliver business growth alongside you, our brokers.
We are writing to you with an update on an important piece of relevant legislation, the Consumer Insurance Contracts Act 2019 (the “Act”), which impacts insurers, including Aviva, our customers and you our brokers. As a result, we have set out in this communication and the linked documents below what we require from brokers in order to comply with the requirements from this new legislation, including updating our customers.
This Act was formally commenced by the Government and made legally effective from 1 September 2020. The Act is influenced by similar legislation passed and implemented in the UK, Australia and elsewhere (but under very different market circumstances). The Act received support from all government parties and passed through all Dáil and Seanad approvals in 2019 and was signed into law by the President of Ireland on 26 December 2019.
The Act applies to policies of consumers (non-business customers and business customers with an annual turnover of €3 million or less in their previous financial year) and therefore only impacts on your customers which meet these criteria. The purpose of the Act is to increase the protection for consumers purchasing insurance policies from insurance companies in Ireland, through increased transparency during the new business application and policy life cycle, and to strengthen their legal and contractual rights during the term of their cover. The Act sets out further requirements insurance companies must meet when entering into contracts/policies with consumers. As a result, insurers will be required to adopt the changes resulting from the law on a phased basis up to 1 September 2021. This update to the law will apply to all eligible policies that are entered into, renewed or are altered on or after 1 September 2020.
Aviva is supportive of the goals of this significant new reform, but the implementation of certain provisions will likely cause difficulties for insurers. I would like to highlight that, since January 2020, Aviva has provided feedback to the Minister of Finance, Paschal Donohoe and Department of Finance officials on the need to incorporate more expert feedback from insurers, including Aviva, into some specific provisions of the Act and on the timing and duration of commencement. Due to the significant operational and resource impact on insurers from implementing the Act and the potential negative consumer impact, Aviva proposed a two-year commencement timetable to the Minister. This feedback was not taken on board and since confirmation of the commencement timetable in July, we have reiterated to the Minister and Department of Finance the adverse impacts for insurers and consumers from what we believe is a premature and excessively short commencement timetable starting on 1 September 2020. We will continue our dialogue with the Minister and Department of Finance to constructively influence the duration of the commencement process for the benefit of all stakeholders.
The changes to the law brought about by the Act mean that Aviva will be reviewing and updating all customer and policy documentation. We are progressing changes to all of our impacted documents, systems and processes to include the requirements from the new legislation during 2020 and 2021 and will be engaging with Inse-com to complete the necessary changes to shared services (such as the Applied broker software system) in the broker market. When this process is completed, we will provide you with updated customer information. We would also like to reassure you that our customers’ policies remain valid and all the relevant changes resulting from the Act will apply to their policies.
As a result of this legislation being enacted, we now require the following input and actions from you;
Review and understand the Aviva Terms of Business Letter, which sets out in detail your specific responsibilities going forward. Click here.
We have provided you with a customer insert for inclusion in correspondence with customers who meet the criteria underlined earlier in this communication when completing a new business application, mid-term alteration or renewal transaction. Click here.
Following your review of this communication and the two documents linked above if you have any further queries about this communication please contact your Aviva Business Development Manager.
Yours sincerely,
Seán Boyle Head of General Insurance Sales & Distribution
Aviva Insurance Ireland Designated Activity Company, trading as Aviva, is regulated by the Central Bank of Ireland. A private company limited by shares. Registered in Ireland No. 605769. Registered Office: One Park Place, Hatch Street, Dublin 2, Ireland, D02 E651.
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