1. How is the writing of insurance contracts regulated in your jurisdiction?
There is no statutory definition of a contract of insurance under Irish law. The law in relation to insurance contracts in Ireland is primarily governed by common law principles, the origins of which can be found in case law. The Irish courts have addressed this issue on a case by case basis. The decision of the English courts in Prudential Insurance Company v Inland Revenue Commissioners [1904] 2 KB 658, which sets out the elements of an insurance contract, is the seminal English case in this area and is of persuasive authority in Ireland. The cumulative test in the Prudential case can be summarised as follows:
- The contract must provide that the insured, in return for consideration, will become entitled to something on the occurrence of some event.
- The event must be one that involves an element of uncertainty.
- The insured must have an insurable interest in the subject matter of the contract.
The Central Bank of Ireland (the "Central Bank") is responsible for the prudential regulation of (re)insurers and intermediaries operating in Ireland. The Central Bank regulates the pursuit of (re)insurance business, rather than simply the issuance of insurance contracts. An insurer must seek authorisation for the specific classes of insurance business it intends to underwrite. There are 18 classes of non life insurance business and nine classes of life insurance business as set out in Schedules 1 and 2 of the European Union (Insurance and Reinsurance) Regulations 2015 (the "2015 Regulations"). A reinsurer can seek authorisation for life (re)insurance business, non life (re)insurance business, or both.
Generally speaking, the Central Bank has no involvement in supervising the writing of insurance contracts and insurers retain significant freedom of contract. It should be noted that the Central Bank does not require the submission of product documents by insurers operating in the Irish market. However, the Central Bank may, from time-totime, request that an insurer provides its general and special policy conditions, scales of premiums and other documents which the insurer uses in its dealings with policyholders. The Central Bank may request such information in respect of an insurance contract in order to verify its compliance with applicable requirements.
The Central Bank undertakes ongoing reviews and assessments of a (re)insurer's corporate governance, risk management and internal control systems. The Central Bank regularly conducts themed inspections across the industry.
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This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
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