Ireland has a common-law legal system. The law in relation to insurance contracts is primarily governed by common-law principles – the origins of which can be found in case law.

Following the enactment of the Consumer Insurance Contracts Act 2019 (CICA), the Marine Insurance Act 1906 (MIA) only applies to non-consumer contracts. There are some forms of insurance that are compulsory under statute in Ireland (eg, third-party motor insurance and professional indemnity cover for certain professionals).

There is no Irish equivalent of the UK Insurance Act 2015. CICA was signed into law in 2019 and reformed consumer insurance law. It commenced in two stages (on 1 September 2020 and 1 September 2021), following industry pressure to allow sufficient time for the insurance industry to account for the far-reaching changes imposed. For consumer insurance contracts, CICA has replaced the duty of utmost good faith and the consumer’s duty of disclosure with a duty to provide responses to questions asked by the insurer honestly and with reasonable care.

Consumers

There are some restrictions on insurers’ freedom of contract (largely for the protection of consumers), as they are subject to the enactment of Irish legislation to comply with EU law. Consumer protection law has undergone several changes as a result of the Unfair Terms in Consumer Contracts Directive 1993/13/EC and the Distance Marketing of Financial Services Directive 2002/65/EC.

When dealing with a “consumer”, the insurer must also comply with the Central Bank of Ireland (CBI)’s Consumer Protection Code 2012 (CPC), the Consumer Protection Act 2007, and the Consumer Rights Act 2022 (CRA). Under the CPC, “consumer” is broadly defined and includes individuals and small businesses with a turnover of less than EUR3 million. The same definition is applied for CICA purposes. “Consumer” under the CRA is defined as “an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”. It is important to note, however, that the current proposal under the review of the CPC (see 12. Developments in Insurance Law) is to amend the turnover figure to less than EUR5 million. At the time of writing, this has not yet been approved.

Insurance contracts, and the marketing and selling of insurance products to consumers, must also be compliant with the terms of the Sale of Goods and Supply of Services Act 1980 (as amended by the CRA).

Ireland has a strong and efficient risk-based prudential regulatory framework, focusing on the application of the proportionality principle.

Central Bank of Ireland

The CBI has primary responsibility for the prudential supervision and regulation of (re)insurance undertakings in Ireland. The CBI carries out this role through monitoring and ongoing supervision and it issues standards, policies and guidance with which (re)insurance undertakings must comply.

The CBI oversees the corporate governance functions, risk management and internal control systems of (re)insurance undertakings without placing burdensome administrative requirements on their operators. Such undertakings are required to submit annual and quarterly returns on solvency margins and technical reserves for supervisory purposes. The CBI also conducts regular themed inspections across the (re)insurance sector.

The CBI operates a rigourous authorisation process and conducts fitness and probity (F&P) assessments of individuals who are to hold certain designated management functions and positions within authorised firms. It also has responsibility for consumer protection issues.

Risks and risk ratings

An administrative sanctions regime provides the CBI with a credible enforcement tool and acts as an effective deterrent against breaches of financial services law. The CBI’s supervisory framework, Probability Risk and Impact SysteM (PRISM), is a risk-based framework that categorises regulated firms by the potential impact of their failure on the economy and the consumer. Under PRISM, (re)insurance undertakings are allocated a risk rating on a scale of high (including ultra-high), medium-high, medium-low or low.

PRISM recognises that the CBI does not have infinite resources and, as such, selectively deploys supervisors according to a firm’s risk rating. High-impact firms are recognised as the most important for ensuring financial and economic stability and are therefore subject to a higher level of supervision.

Consumer protection risk assessments

The CBI’s Consumer Protection Risk Assessment (CPRA) model aims to enhance the way regulated entities manage “the risks they pose to consumers and ensure they have appropriate risk management frameworks to deliver for their customers”. (Re)insurance companies must implement a consumer protection risk management framework that is tailored to the nature, scale and complexity of their business. The CBI assesses the effectiveness of these internal management frameworks through targeted CPRAs, in addition to PRISM and regular thematic inspections.

II Code and the 2015 Regulations

The Insurance Institute’s Code of Ethics and Conduct (the “II Code”) is also relevant to the regulation of (re)insurance undertakings. The II Code is a voluntary code of conduct aimed at protecting policyholders resident in Ireland. It has been adopted by members of Insurance Ireland, which is the representative body for (re)insurance undertakings in Ireland.

EU Directive 2009/138/EC (“Solvency II”) introduced a common regulatory framework for European Economic Area (EEA) (re)insurance undertakings and was transposed into Irish law by the European Union (Insurance and Reinsurance) Regulations 2015 (the “2015 Regulations”). The 2015 Regulations impose harmonised capital and solvency requirements, valuation techniques, and governance and reporting standards. They also impose certain restrictions on shareholders of (re)insurance undertakings, as the CBI will not grant an authorisation to an undertaking if it is not satisfied as to the suitability and F&P of “qualifying” shareholders.

For the purposes of the 2015 Regulations, a qualifying shareholding means a direct or indirect holding in an undertaking that:

• represents 10% or more of the capital or voting rights of the undertaking; or
• makes it possible to exercise a significant influence over the management of the undertaking.

Insurance Distribution Regulations

The European Union (Insurance Distribution) Regulations 2018 (IDR) transposed the Insurance Distribution Directive (EU) 2016/97 (IDD) into Irish law. The IDD harmonises the distribution of (re)insurance products within the EU, with the aim of facilitating market integration and enhancing consumer protection. The IDR were designed to:

• enhance consumer protection and ensure a level playing field across the sector by extending the scope of application to include all participants in the distribution of insurance products;
• identify and mitigate conflicts of interest, particularly regarding remuneration; and
• introduce increased transparency and conduct of business requirements.

See 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance.

Insurance undertakings and intermediaries authorised by the CBI or in another EU/EEA member state carrying on business in Ireland must comply with certain Irish general good requirements, such as the CPC. The CPC contains general and specific provisions concerning insurance, including requirements relating to premium handling and contact with consumers (eg, information that must be provided to consumers before entering into a contract for a product or service, as well as records, errors, rebates and claims processing).

Persons carrying out a “controlled function” on behalf of financial service providers are expected to satisfy the minimum professional knowledge and competency requirements set out in the Minimum Competency Code and Regulations 2017 (MCC).

A range of taxes, levies and duties are applied to insurance policies, as follows.

• Non-life insurance policies attract a quarterly levy of EUR1 stamp duty on insurance policies where the risk is located in Ireland and the premium or premiums payable over a period of 12 months is EUR20 or greater.
• Non-life insurance policies also attract a levy of 3% on the gross amount received by an insurer in respect of certain non-life insurance premiums. An additional 2% contribution to the Insurance Compensation Fund applies to premiums received in relation to non-life insurance policies.
• Life assurance premiums attract a levy of 1% of gross premiums.

Health insurance attracts levies that, depending on the cover, range from EUR105–EUR420 in respect of relevant contracts renewed or entered into on or after 1 April 2024.

Licensing of (Re)insurance Companies

Undertakings wishing to carry on (re)insurance business in Ireland must obtain authorisation from the CBI or another EU regulator through the “single passport” regime. The CBI has published a checklist for completing and submitting applications for authorisation under the 2015 Regulations (the “Checklist”), along with a guidance paper to assist applicants. The application comprises the completed Checklist and a detailed business plan plus supporting documents (the “Business Plan”) that is submitted after a preliminary meeting with the CBI.

The principal areas considered by the CBI in evaluating applications include:

• legal structure;
• ownership structure;
• overview of the group to which the applicant belongs (if relevant);
• scheme of operations;
• system of governance, including the F&P of key personnel;
• risk management system;
• own risk and solvency assessment;
• financial information and projections;
• capital requirements and solvency projections; and
• consumer issues (such as the MCC and the CPC).

A high-level overview of the application for authorisation process is as follows:

• arrange a preliminary meeting with the CBI to outline the proposals – at which, the CBI will provide feedback in relation to the proposal and identify any areas of concern that should be addressed before the application is submitted;
• prepare and submit the completed Checklist and Business Plan;
• dialogue with the CBI;
• the CBI’s authorisation committee considers the application;
• once the CBI is satisfied with the application, it will issue an “authorisation in principle” – meaning it is inclined to grant its approval as soon as certain conditions have been satisfied; and
• once all conditions are satisfied, the CBI will issue the final authorisation and the (re)insurer can commence writing business in Ireland.

The application process is iterative, involving consultation with the CBI after an application is formally submitted. During the review process, the CBI will typically request additional information and documentation, and it may have comments on certain features of the proposal. The CBI may seek additional meetings with the applicant to discuss aspects of the proposal in further detail.

The CBI will issue a formal authorisation once satisfied that the capital requirements and pre-licensing requirements have been met. Throughout this process there will be multiple meetings and the CBI may request additional information. The process can take between four to six months. The CBI does not currently charge a fee for licence applications.

Position of UK-Based Insurers After 31 December 2020

The Brexit deal agreed in December 2020 between the UK and the EU was largely silent on financial services. Consequently, at the end of the transition period on 31 December 2020, the UK became a third country and UK-authorised insurers can no longer rely on the EU passporting regime to access the Irish and EU market.

In anticipation of this, the Irish government introduced the Temporary Run-Off Regime (TRR) through Part 10 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 (the “Brexit Omnibus 2020 Act”). This has become crucially important for those UK/Gibraltar insurers and insurance intermediaries that have Irish customers and decided against establishing an EU-authorised entity to access Ireland post-Brexit.

Part 10 of the Brexit Omnibus 2020 Act addresses the issue of insurance contract continuity and inserts provisions into the 2015 Regulations and the IDR, thereby permitting a UK firm to administer its run-off business in Ireland for 15 years from 31 December 2020 “in order to terminate its activity” in Ireland. Crucially, no new business is permitted but compliance with the “general good” provisions remains a requirement.

The Insurance (Miscellaneous Provisions) Act 2022 amends the 2015 Regulations to provide for technical changes to ensure that UK- and Gibraltar-based insurance firms providing reinsurance to Irish-based insurers through the third-country exemption – along with firms in liquidation – can rely on the TRR to run off their existing Irish insurance contracts.

Third-Country Reinsurers

Third-country reinsurers are excluded from the application of the 2015 Regulations where the reinsurer:

• has its head office in a third country;
• is lawfully carrying out reinsurance in that third country; and
• is carrying out reinsurance (but no other activity) in Ireland.

The effect is that a third-country reinsurer is not required to be authorised in accordance with the 2015 Regulations to carry out reinsurance business in Ireland.

Freedom of Establishment or Freedom of Services Basis

(Re)insurance undertakings authorised in an EU/EEA member state may carry out business in Ireland on a Freedom of Establishment basis through a local branch or operate in Ireland on a Freedom of Services basis, provided that their home state regulators notify the CBI. Passporting undertakings must comply with the Irish “general good” requirements.

Special Purpose Reinsurance Vehicles

A reinsurance provider can establish a special purpose reinsurance vehicle, thus providing a quicker, simpler route to authorisation and reducing supervision compared with fully regulated reinsurers.

Establishing Third-Country Insurance Branches in Ireland

The 2015 Regulations facilitate a non-EEA insurer establishing a branch in Ireland (“third-country branch”), subject to the fulfilment of specific regulatory requirements. The 2015 Regulations impose standalone capital requirements on third-country branches and require the third-country branches to:

• hold assets in Ireland of at least 50% of the absolute floor prescribed in the 2015 Regulations in respect of the minimum capital requirement (EUR3.7 million); and
• deposit 25% of that amount with the Irish High Court as security.

The local substance requirements for a third-country branch will depend on the nature, scale and complexity of its operations. The CBI will expect an appropriate number of senior management in Ireland so as to demonstrate a sufficient level of local oversight and control. As a minimum, a branch manager and a branch management committee in Ireland with day-to-day responsibility for corporate governance of the branch will be required.

Significantly, a third-country branch does not have the right to passport into other EU/EEA jurisdictions and is only permitted to write business in the jurisdiction in which it is established. Therefore, a third-country branch is not suitable for third-country insurers seeking to write business across the EU/EEA. Post-Brexit, establishing a third-country branch may not represent a comprehensive solution for UK insurers seeking to maintain access to the single market; therefore, establishing an EEA-authorised subsidiary has been the preferred option.

The CBI does not currently permit 100% reinsurance arrangements.

There has been a decrease in the overall number of transactions in the Irish M&A market in 2024, with 185 announced transactions for Irish companies in the first half of 2024 – marking a 20% reduction compared with the same period in 2023. However, the overall value of M&A activity in 2024 has increased significantly by 207%, due partly to several substantial deals in the technology sector.

M&A activity in the Irish insurance market has remained steady, with a total of 22 recorded deals in 2024. This represents a slight increase from the 21 recorded deals in 2023.

There were five landmark deals (of value greater than EUR500m) in the first half of 2024. However, despite this, the middle market still made up the majority of the value of deals – with 84% of deals disclosed coming in between EUR5 million and EUR250 million. Private equity accounted for 19% of all M&A activity in Ireland in the first half of 2024.

Certain sectors in Ireland demonstrated huge growth in the first half of 2024, with 79% of the value of all M&A deals being made in the TMT sector. This marked a huge increase compared to the 22% of overall market activity for the TMT sector in the first half of 2023. The total value of M&A activity in the pharma, medical and biotech sector similarly rose from just 4% of total market value of deals in 2023 to 25% in 2024. While the total value of M&A activity in certain sectors has changed, the total number of deals has remained fairly consistent across most sectors. The number of financial services sector deals increased slightly from 8% of total deals to 11% of total deals. Similarly, business services deals increased from 13% of total deals to 17% of total details.

2024 has been a mixed picture in general for the Irish M&A market, with a large increase in the value of deals offsetting an overall decrease in the number of transactions. Irish M&A is highly resilient and activity levels are anticipated to remain healthy into 2025.

Insurance Distribution Regulations

The IDR govern the distribution or sale of insurance products and apply to persons engaged in insurance distribution business in the Irish market, such as agents, brokers and bancassurance operators. However, insurers can also distribute insurance products directly to customers.

Definition of insurance distribution

Under the IDR, insurance distribution is defined as “any activity involved in advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts, or of assisting in the administration and performance of such contracts ‒ in particular, in the event of a claim, the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media”.

The following activities are specifically excluded:

• claim management on a professional basis;
• loss adjusting;
• expert claim appraisal; and
• mere provision of information if no additional steps are taken by the provider to assist in concluding an insurance or reinsurance contract.

The IDR clarifies that “introducing” is not considered a regulated activity under Irish law.

Impact of the IDR

The IDR introduces enhanced information and conduct of business requirements for insurance distributors. “Ancillary insurance intermediaries” are exempt from the IDR where certain conditions are satisfied.

The IDR prescribes certain requirements relating to product oversight and governance (POG), which aim to:

• enhance consumer protection by ensuring insurance products meet the target market’s needs; and
• mitigate the risk of mis-selling by insurance distributors.

Insurance undertakings (and relevant intermediaries) are required to implement POG procedures prior to distributing or marketing an insurance product to customers.

The IDR requires distributors to have product distribution arrangements (PDA) in place containing appropriate procedures to obtain all pertinent information on the products they intend to offer to their customers from the manufacturer. The PDA should be a written document made available to their staff, aiming to:

• prevent customer detriment;
• manage conflicts of interest; and
• ensure the objectives, interests and characteristics of customers are considered.

Investment Intermediaries Act 1995

Previously, two pieces of legislation governed intermediaries operating in Ireland. The European Union (Insurance Mediation) Regulations 2005, which have been fully repealed, and the Investment Intermediaries Act 1995 (IIA). The IDR brought welcome clarification regarding the application of the IIA to insurance intermediaries by revoking all references to insurance.

Authorisation

(Re)insurance brokers/intermediaries require CBI authorisation to:

• carry out (re)insurance distribution or advise consumers in relation to general insurance products, life assurance, health and medical insurance products; or
• act as an insurance intermediary for an insurance company with which they have an agreement or carry out certain activities (such as loss assessing or assisting consumers in dealing with claims under insurance contracts).

(Re)insurance brokers/intermediaries are subject to ongoing CBI supervision of their compliance with the registration requirements, including completing an annual return and holding an adequate professional indemnity insurance policy. The CBI maintains a register of authorised (re)insurance intermediaries in Ireland. (Re)insurance undertakings involved in the distribution of insurance products must also comply with the national “general good” provisions that regulate how undertakings may sell and market insurance products to consumers in Ireland.

Position of UK-Based Insurance Intermediaries After 31 December 2020

See 3.1 Overseas-Based Insurers or Reinsurers.

Parties to a non-consumer insurance contract are subject to the duty of utmost good faith (Section 17 of the MIA). The proposer or insured has a duty to disclose all material facts. A material fact is one that would influence the judgment of a prudent underwriter in deciding whether to underwrite the contracts and, if so, on what terms. The duty goes beyond answering questions on a proposal form correctly; every material representation made by the insured or proposer, or their agent, to the insurer must be true.

CICA replaces the duty of good faith for consumer insurance contracts and the MIA no longer applies to these contracts. Since 1 September 2021, the consumer proposer’s duty is limited to a duty to provide responses to specific questions asked by the insurer honestly and with reasonable care.

The majority of provisions of CICA took effect from 1 September 2020. The remaining sections commenced on 1 September 2021 – except for Section 18(4), which was clarified and amended by the Insurance (Miscellaneous Provisions) Act 2022.

Prior to CICA, the remedy for breach of the duty of utmost good faith was avoidance of the policy. CICA introduced new proportionate remedies (proportionate to the effects of the misrepresentation, depending on whether it was innocent, negligent or fraudulent) for a breach of the new duty of disclosure. Section 8(6) requires an insurer to establish inducement to avail of the remedies under CICA for a breach of the duty of disclosure.

Typically, an insurance intermediary is deemed to be acting on behalf of the customer at all times during the negotiation of an insurance contract ‒ except when collecting premiums on behalf of the insurer. However, certain intermediaries act for and on behalf of an insurer as a tied insurance intermediary.

Under the IDR, insurance distributors are required to act honestly, fairly and professionally in accordance with the best interest of their customers, irrespective of whether the intermediary is negotiating an insurance contract as an individual broker or acting as a tied insurance intermediary. The information and transparency requirements set out in the IDR require an intermediary to promptly disclose whether it is representing the customer – or acting for and on behalf of the insurer – before the contract concludes. Any remuneration received by an intermediary in relation to a contract must be disclosed to the customer. Ongoing requirements include:

• good reputation of directors;
• knowledge and ability of senior management and key personnel;
• holding of minimum levels of professional indemnity insurance; and
• maintenance and operation of client premium accounts.

There are no specific rules for the formation of an insurance contract under Irish law, beyond the general principles of contract law, common law and the duty of good faith. There is no statutory definition of an insurance contract and legislation does not specify its essential legal elements. International Commercial Bank plc v Insurance Corporation of Ireland set out the main characteristics of an insurance contract, which are:

• an insurable interest;
• payment of a premium;
• the insurer undertakes to pay the insured on the happening of an insured risk;
• the risk must be clearly specified;
• indemnification; and
• the principle of subrogation is applied where appropriate.

CICA defines an insurance contract as “a contract of life insurance or non-life insurance made between an insurer and a consumer” and reforms the law relating to insurable interests.

No information is available for this jurisdiction.

Consumer contracts are now governed by CICA. The legal requirements of insurance and reinsurance are the same.

ART transactions are recognised as reinsurance transactions under the 2015 Regulations and are characterised by the CBI in a manner consistent with the Solvency II regime.

There has been a slowdown in recent years in the number of ART deals in Ireland. The CBI has concerns relating to the viability of ART transactions and the potential risks for insurance carriers, particularly in relation to basis risks. Further, it is not clear if ART transactions entered by life insurers comply with the requirements to be “fully funded”. Significant growth is not expected in the coming years.

No information is available for this jurisdiction.

Insurance contracts are subject to the same general principles of interpretation as other contracts. The Supreme Court has confirmed in two judgments (Analog Devices v Zurich Insurance and Emo Oil v Sun Alliance and London Insurance Company) that the principles of construction set out by Lord Hoffman in ICS v West Bromwich Building Society should be applied to the interpretation of insurance contracts.

The Irish courts consider the ascertainment of the meaning that the document would convey to a reasonable person, having all the background knowledge that would reasonably have been available to the parties in the situation in which they were at the time of the contract (“matrix of fact”). Certain things are excluded from the admissible background, including previous negotiations and declarations of subjective intent. The meaning of the document is not the same as the particular meaning of the words; it is what the parties using those words against the relevant background would reasonably have understood them to mean.

The courts apply the words’ ordinary and natural meaning. It is assumed that people ordinarily do not make linguistic mistakes in formal documents. However, if it is clear from the matrix of fact and the background that something is wrong with the language, judges can attribute to the parties the intention they clearly had.

The court takes an objective approach to determining the intention of reasonable persons in the position of the parties. Where a contractual term is genuinely ambiguous, the contra proferentem rule will apply and the interpretation less favourable to the drafter is adopted. The rule also applies to consumer contracts.

In non-consumer contracts, no specific wording is required to create a warranty. The word “warranty” is not required but may be considered as evidence of the intention to create a warranty. Further, a warranty may be express or implied (Section 33 of the MIA).

A warranty is treated differently to a contractual term in that it must be exactly complied with, whether it is material to the risk or not. The insurer is discharged from liability from the date of breach of the warranty – although without any prejudice to any liability incurred before that date.

The Irish courts construe warranties strictly, as a breach entitles the insurer to repudiate liability even if the breach is not material to the loss. CICA replaces warranties in consumer contracts with suspensive conditions and abolishes basis of contract clauses.

The effect of a breach of a condition depends on whether the condition is a condition precedent to liability. Conditions precedent to liability relate to matters arising after a loss has occurred – most commonly in relation to notification. The Irish courts will generally not construe an insurance condition as a condition precedent unless it is expressed as such or the policy contains a general condition precedent provision. Breach of a condition precedent means that an insurer can repudiate liability for the claim without any requirement to demonstrate prejudice. There is no requirement for a link between the breach and the damage.

The consequences for breach of a bare condition are in damages.

In consumer contracts, conditions precedent could now be considered “continuing restrictive conditions” following commencement of CICA.

Insurance contracts typically contain a dispute resolution clause. An insurance contract may contain an arbitration clause or may stipulate another form of ADR. In a consumer contract, a consumer may make a complaint to the Financial Services and Pensions Ombudsman (FSPO) (see 9.7 Alternative Dispute Resolution (Financial Services and Pensions Ombudsman)).

Choice of forum, venue and applicable law clauses in (re)insurance contracts are generally recognised and enforced. Where an insured is domiciled in an EU member state, regard should be had to the following regulations that may limit these provisions:

• Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Brussels I Regulation”);
• Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Recast Brussels Regulation”), which replaces the Brussels I Regulation in respect of proceedings and judgments commenced after 10 January 2015;
• Regulation (EC) 593/2008 on the law applicable to contractual obligations (the “Rome I Regulation”);
• Lugano Convention (L339, 21 December 2007) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters; and
• the Hague Choice of Court Agreements Convention 2005.

In Ireland, the district court deals with claims up to a monetary value of EUR15,000, the circuit court deals with claims up to EUR75,000 (EUR60,000 for personal injury cases), and the High Court has unlimited monetary jurisdiction. Insurance disputes are heard by a single judge with no jury.

The Commercial Court is a specialist division of the High Court dealing exclusively with commercial disputes. Where the monetary value of a (counter)claim exceeds EUR1 million and the dispute is commercial in nature, either party may apply to have the dispute heard in the Commercial Court. There is no automatic right of entry; it is at the judge’s discretion and can be refused if there has been any delay.

Commercial Court proceedings progress much quicker. Generally, the time from entry into the Commercial Court to the allocation of a trial date ranges from a matter of weeks to between four and six months, depending on complexity and the number of parties.

Appeals from the High Court are dealt with by the court of appeal, except when the Supreme Court believes a case is of such public importance that it should go directly to the State’s highest court.

Evidence

Evidence is given orally, except in very limited circumstances. Where a party intends to rely upon the (factual or expert) oral evidence of a witness, a witness statement or expert report must be filed – unless a judge orders otherwise.

Costs

Typically, costs follow the event, whereby the loser pays. However, where litigation is “complex”, the Commercial Court often analyses whether the winning party has succeeded on all grounds.

Limitation

The general position under the Statute of Limitations Act 1957 is that claims for breach of contract must be brought within six years of the date of breach. Where a complaint is made to the FSPO, there is an extended limitation period applicable to complaints relating to “long-term financial services” (ie, those for which the maturity or term extends beyond five years and one month, or life assurance policies not subject to annual renewal) – otherwise a six-year rule applies.

For non-EU, non-Lugano Convention and non-Hague Convention judgments, an originating High Court summons is required to recognise and enforce a foreign judgment, and the High Court must grant leave to issue and serve the proceedings. To succeed, a foreign judgment must be for a definite sum, be final and conclusive, and be handed down from a court of competent jurisdiction. The High Court may refuse to recognise and enforce a judgment on several grounds (eg, fraud, lack of jurisdiction) that are contrary to Irish law or the principles of natural justice.

See 9.7 Alternative Dispute Resolution.

See 9.7 Alternative Dispute Resolution.

Insurance disputes may also be dealt with by ADR mechanisms such as mediation and arbitration.

Arbitration

Where an insurance contract contains an arbitration clause, a dispute must be referred for arbitration. However, consumers are not bound by an arbitration clause where the claim is less than EUR5,000 and the relevant policy has not been individually negotiated.

The Arbitration Act 2010 (the “2010 Act”) incorporates the UNCITRAL Model Law on International Commercial Arbitration. Under the 2010 Act, the decision of an arbitrator is binding on the parties and there is no means of appeal. Where parties have entered into valid arbitration agreements, the courts are obliged to stay proceedings.

Although arbitration may result in additional costs, there is the benefit of confidentiality.

Ireland is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”), allowing Irish arbitral awards to be enforced in any of the 157 countries party to the New York Convention.

The courts can set aside an arbitral award under Article 34 of the 2010 Act, albeit on very limited grounds. The party seeking to have the arbitral award set aside must prove that either:

• a party to the arbitration agreement was under some incapacity or the agreement itself was invalid;
• the party making the application was not given proper notice of the arbitrator’s appointment or the arbitral proceedings (or was otherwise unable to present their case);
• the award deals with a dispute outside the ambit of the arbitration agreement;
• the arbitral tribunal was not properly constituted; or
• the award conflicts with the public policy of the State.

The 2021 High Court decision in Charwin Limited t/a Charlie’s Bar v Zavarovalnica Sava Insurance Company DD demonstrates that the bar is high when seeking to resist a referral to arbitration on grounds of public policy.

In the recent case of Flatley v Austin Newport Group Limited and Others, the High Court rejected the assertion that an arbitration clause in a consumer contract amounted to an “unfair term”, contrary to the provisions of the Consumer Rights Act 2022 (the “2022 Act”). Section 132(1)(e) of the 2022 Act provides that a term in a consumer contract in relation to arbitration is unfair if that term provides that the consumer is required to pay their own costs. The High Court considered that the arbitration clause would be an unfair term if it required the consumer to pay their own costs. However, the arbitration clause in this case contained no such requirement.

Mediation

Under the Mediation Act 2017 (the “Mediation Act”), solicitors in Ireland must advise their clients of the merits of mediation as an ADR mechanism before proceedings are issued. The Mediation Act provides for any court to adjourn legal proceedings in order to allow the parties to engage in mediation.

The court can make such an order on its own initiative or on application by either party to the proceedings. There may be cost implications if either party fails to engage in ADR following such a direction from the court.

Financial Services and Pensions Ombudsman

The FSPO is the amalgamation of the Financial Services Ombudsman and the Pensions Ombudsman, pursuant to the FSPO Act 2017. It is an independent body, established to resolve disputes between consumers and insurance providers either through informal means or by formal investigation. The FSPO’s decision is legally binding, with a statutory right of appeal to the High Court.

There is no cause of action in damages for the late payment of claims in Ireland. However, under Section 26 of CICA, where an insurer is in breach of any duty under the Act, the court has the discretion to order that a sum payable in a claim under a contract of insurance be increased in proportion to the breach involved.

Insurers have subrogation rights at common law and subrogation provisions in insurance policies are common. Generally, an indemnity must have been provided before the insurer is entitled to subrogate. CICA has introduced certain restrictions on subrogation rights in the context of family and personal relationships and in employment scenarios.

Irish government bodies, such as Enterprise Ireland and the Industrial Development Authority Ireland, work in tandem to attract and support foreign direct investment in Ireland and promote Ireland as a destination for insurtech companies.

In July 2021, 12 stakeholders in the Irish insurance sector joined together to create InsTech.ie, with the aim of promoting Ireland as an EU insurtech hub. Under the Department of Finance’s Finance Action Plan IFS 2025, InsTech.ie is tasked with building an insurtech hub in Ireland. Since 2022, the Irish insurtech cluster has more than doubled to more than 130 tech start-ups and scale-ups offering solutions to the insurance sector in Ireland and abroad. A study commissioned by InsTech.ie and conducted by Deloitte, Driving Insurtech Growth in Ireland, was published in April 2021. It found that Ireland is “one of the most developed insurance markets” in Europe and is “well positioned to take advantage of the innovation and technological enhancements being developed within the sector as part of the growth of global insurtech”. An updated report, published in October 2024, found 86% of insurtechs were optimistic about the future of insurtech in Ireland in the next 12 months.

One significant Irish insurtech firm is Blink, which was founded in 2016 to build data-driven travel disruption insurance solutions. In 2020, the firm launched Blink Parametric, offering a full suite of parametric insurance solutions. Blink made it onto The Insurtech100 in 2019, 2020 and 2022, and featured in a spotlight position in InsTech.ie’s 2024 Irish Insurtech Report. In July 2023, Blink announced its intention to create 30 new jobs in Cork, which will effectively double its workforce by the end of 2025. In October 2024, Blink won the Best Parametric Insurance Product at the Global Insurtech Awards 2024.

In 2021, 2022, 2023 and 2024, Companjon – an innovative insurtech start-up headquartered in Dublin – was named in The Insurtech100. Companjon is Europe’s leading specialist in unique add-on insurance that is 100% digital. Companjon has been recognised by Forbes as “a tech-driven disruptor that is changing the way people think about insurance”.

The CBI is responsive to the challenges posed by the regulatory treatment of financial innovations. It is a robust regulator, acknowledging the need to strike the appropriate balance between encouraging innovation-related entry to the market and ensuring new entrants are sufficiently ready to fulfil all their regulatory obligations in relation to financial stability and consumer protection. The CBI is cognisant of the requirement to keep abreast of the changing technological environment and has committed significant resources to improving its data architectures and establishing quantitative analytical teams in its banking, insurance and markets directorates.

The CBI has taken a range of measures in relation to fintech, including:

• establishing the Innovation Hub in 2018 for engagement with fintech companies;
• creating an innovation steering group and a fintech network within the CBI; and
• engaging with the European Supervisory Authorities and the Single Supervisory Mechanism on the EC’s Fintech Action Plan.

In November 2023, the CBI launched a consultation paper on innovation engagement (“CP156”), which considered possible enhancements to how the Innovation Hub operates and a new proposal to establish the Innovation Sandbox Programme (the “Sandbox”). In June 2024, the CBI published a feedback statement on CP156. Based on the positive feedback received, the CBI announced that it will establish the Sandbox proposed. In December 2024, the CBI confirmed that the first iteration of the Sandbox will commence shortly and will last for a period of six months. The area of focus will be firms developing a product or service that uses innovative technologies to foster and develop solutions that minimise fraud, enhance AML/CFT frameworks and encourage day-to-day transaction security for consumers. More than 38 applications were received from Ireland, the rest of the EU, and the UK.

Also in December 2024, the CBI partnered with the Insight Research Ireland Centre for Data Analytics. The partnership is set to deepen the CBI’s understanding of applications of AI and data science to safeguard consumers and financial systems by providing additional research capacity.

“Emerging risks” are new, evolving risks that are difficult for insurers to assess and which carry a high degree of uncertainty with regard to their impact and probability, as well as the amount of losses expected. The CBI expects Irish insurance undertakings to consider assessing emerging risks and to adopt a longer-term perspective than is typical in business planning and strategy-setting processes. The CBI expects to see evidence of robust analysis and timely, effective action relating to emerging risks.

Cyber-risk and digitalisation risks are the most formidable emerging risks in Ireland. In March 2023, the CBI’s Final Guidance on (Re)Insurance Undertakings on Climate Change Risk stated that climate change risk has now moved from an emerging risk to a key risk, given the impact that climate change is already having on the insurance sector. The CBI expects (re)insurers to manage climate risks in the same manner that they manage other key risks within their risk management framework.

Cyber-Risk

Digital innovation and growing sophistication in digital technology have led to increased cybersecurity threats and data breach risks. The CBI published cross-industry guidance in respect of IT and cybersecurity risks in 2016, highlighting a variety of emerging threats. This guidance noted that IT and cybersecurity and associated risks are a key concern for the CBI. In October 2020, the European Insurance and Occupational Pensions Authority (EIOPA) published its Guidelines on ICT Security and Governance. The CBI confirmed that these guidelines supersede the CBI’s 2016 guidance but do not contradict anything in that guidance.

In December 2021, the CBI published its final Cross-Industry Guidance on Operational Resilience to assist financial firms to prepare, respond, recover and learn from an operational disruption affecting delivery of critical or important business services. Anticipating the Digital Operational Resilience Act (DORA), the CBI noted that these guidelines were compatible with and complementary to DORA and that there were no contradictions between the two. However, more recently, the CBI acknowledged that certain national guidance will need to be updated in order to align with DORA, including guidance on “operational resilience” and “outsourcing”.

In late 2023, the CBI launched a thematic review of insurance companies’ cybersecurity safeguards. It aimed to assemble a range of cybersecurity controls, based on responses to a recent cybersecurity questionnaire. The CBI continued with this thematic review into 2024. To date, no additional actions arising out of the review have been communicated by the CBI more broadly.

Longevity Risk

Longevity risk is the potential risk of an individual living longer than expected. The financial implications of exponentially increasing lifespans are colossal. An average life expectancy increase of three years would cause the cost of supporting the ageing population to increase by 50%. As the mortality risk continues to decrease, it is crucial for insurers to understand the associated risks.

Considering how quickly life expectancy is increasing, projecting future liabilities based solely on data extrapolated from the past is imprecise. Consequently, certain companies have created insurance subsidiaries to run their pensions schemes, who then reinsure its longevity risk with a reinsurer. From a reinsurance perspective, buying this longevity risk may be an attractive financial transaction – given that it lowers mortality risk and thereby helps balance life insurance risks. However, the International Monetary Fund stated that longevity risk should be shared between insurers and governments, as insurers and reinsurers alone may be constrained by capital.

Warranty and Indemnity Insurance

Warranty and indemnity insurance is being used more frequently in commercial transactions, as are other bespoke transactional products such as litigation buyout policies.

Addressing Emerging Risks

Cyber-insurance is a relatively new product on the Irish market but has grown in popularity, with several insurers offering new cyberproducts in Ireland. However, Domhnall Cullinan, the director of insurance supervision at the CBI, has voiced concern about the Irish market’s positioning to take advantage of this growth area, stating: “The Irish insurance industry does not find itself as a large provider of capacity in the international market… without appropriate pricing and adequate reserving and the right expertise to underwrite the risk.”

EIOPA noted that almost 70% of SMEs are not covered for cyber-attack risks. In September 2023, EIOPA launched a survey on access to cyber-insurance by SMEs to better understand the difficulties small businesses face in protecting themselves from cyber-risks and to assess the level of access to cyber-insurance. The survey found that cyber-risks remain at a medium level, with an increasing risk outlook for the next 12 months. It also showed that the cyber underwriting has been limited in the EEA insurance sector, primarily owing to challenges faced concerning pricing and uncertainty about the nature of the risks.

Health Insurance (Amendment) and Health (Provision of Menopause Products) Act 2024

On 11 November 2024, the Health Insurance (Amendment) and Health (Provision of Menopause Products) Act 2024 was enacted. The Act is currently partly in force and will be fully commenced on 1 April 2025. The Act will:

• amend the Health Insurance Act 1994 to specify the amount of premium to be paid from the Risk Equalisation Fund in respect of certain classes of insured persons from 1 April 2025;
• amend the definition of high-cost claims and include definitions of approved drugs;
• make a consequential amendment to the Stamp Duties Consolidation Act 1999; and
• provide for related matters.

Road Traffic Act 2024

On 14 May 2024, the Road Traffic Act 2024 (Commencement) Order 2024 (SI No 197 of 2024) (the “Road Traffic Act 2024”) was published in Iris Oifigiúil, bringing the majority of the Road Traffic Act 2024 into effect. The Road Traffic Act 2024 amends the definition of “personal powered transporters”, the term used for e-scooters and e-bikes.

Regulations on what criteria an e-scooter must meet to be used legally on public roads may now be commenced. E-bikes that go faster than 25 kilometres per hour and have more than 500 watts of power output will be classed as e-mopeds and require a licence, registration, tax and insurance in order to be used on public roads.

Motor Insurance Insolvency Compensation Act 2024

On 17 October 2024, the Motor Insurance Insolvency Compensation Act 2024 came into effect. The Act establishes a legislative body for dealing with claims arising from motor vehicle accidents where the relevant insurance undertaking is insolvent (“Comhlacht na hÉireann um Chúiteamh Mótair” or the “Compensation Body”). The Act provides the Compensation Body with recourse to funding from the Insurance Compensation Fund and sets out a framework for the presentation and processing of such motor vehicle liability claims, including that claimants should receive payment of compensation within three months from the date their offer of compensation is accepted.

European Union (Insurance Distribution) (Amendment) Regulations 2024

The European Union (Insurance Distribution) Regulations 2024 (the “amended IDR”) set the minimum amount of professional indemnity insurance (PII) that insurance intermediaries are required to hold, which is reviewed every five years. Following the introduction of the amended IDR, the second review was recently completed. These changes have been reflected in the amended IDR by the substitution of “for not less than EUR1,564,610 applying to each claim and in aggregate EUR2,315,610 per year for all claims” for “for not less than EUR1,300,380 applying to each claim and in aggregate EUR1,924,560 per year for all claims”.

Heightened Regulatory Scrutiny

Review of CPC

Following an extensive engagement programme with regulated financial service providers (RFSPs), relevant stakeholders and customers alike, the much-anticipated Consultation Paper on the CPC (the “Consultation Paper”) was issued by the CBI on 7 March 2024. The Consultation Paper seeks to deliver an updated and modernised CPC that reflects the multitude of changes in financial services in recent years – in particular, the impact of digitalisation on its delivery. The CBI hopes that the revised CPC will address these changes to offer improved protection for the consumer, while enhancing clarity and predictability for RFSPs in respect of their consumer protection obligations.

The proposal put forward by the CBI entails a significant overhaul of the existing structure of the CPC by moving to a new format of two separate regulations. Supporting these regulations will be two guidance documents, along with a number of digital tools (yet to be provided) for RFSPs and consumers alike. Cumulatively, these changes represent a significant change in both the structure and scope of the CPC.

The first regulation encompasses the “business standards” (the final component of the Individual Accountability Framework (IAF) to be addressed). The second regulation deals with general requirements – keeping the existing general requirements at its core but introducing a variety of new areas of focus, including digitalisation, informing customers effectively, mortgage credit and switching, unregulated activities, fraud and scams, vulnerability, and climate. In addition, it introduces a number of new sectoral specific obligations. The CPC will also be a consolidation of a number of existing standalone codes, which will be welcomed.

The Consultation Paper was open for feedback until 7 June 2024. The CBI has indicated that it will publish its feedback statement along with the revised CPC in early 2025 and has proposed a 12-month implementation period, starting from the final date of publication of the revised CPC.

CBI publishes “Dear CEO” letter on thematic review of CPRA

On 29 August 2024, the CBI published a “Dear CEO” letter following completion of a targeted consumer protection risk assessment (CPRA) of insurance firms’ consumer protection risk management frameworks (the “Assessment”).

The Assessment considered the appropriateness of insurance firms’ risk management frameworks, with specific regard being had to how the risks posed to consumers are identified, managed and mitigated. The letter sets out follow-up actions that are required to be undertaken by insurance firms and the CBI expects that insurance firms will understand the risks faced by their consumers, not only stemming from the products and services they buy but also from the behaviour of the firms themselves and that of the wider market. With that in mind, the CBI stated that firms must have robust compliance and risk management processes in place in order to anticipate, avoid and manage all risks to consumers.

CBI publishes “Dear CEO” letter on findings from thematic review of compliance with MCC and CPC

On 29 May 2024, the CBI issued an industry letter setting out the findings and actions required as a result of their thematic review of compliance with the MCC and the CPC by retail intermediaries. A number of actions required were set out in the letter.

The CBI has requested that all retail intermediaries ensure the following actions are taken.

• Retail intermediaries are to review their business practices and compliance arrangements against the findings, expectations and good practices set out in the letter and in Schedule 1 of the letter. The review and its outcomes must be documented.
• This review should be completed and an action plan discussed, approved and evidenced by the firm’s management. The CBI expects that this document will be available for review during future engagements with any retail intermediary.
• On completion of this review referenced, the CBI expects that retail intermediaries will apply their improved KYC/suitability arrangements in subsequent engagements with all consumers. Where gaps are identified in KYC/suitability files and documents for existing consumers, retail intermediaries must be proactive and use the next engagement/meeting with their customer to update the relevant KYC fact-find and other related documents.

Regulation and supervision priorities for 2024

On 29 February 2024, the CBI published its Regulatory and Supervisory Outlook for 2024 (the “Outlook”). The CBI explained that it plans to publish such an outlook annually and will set out the key risks and trends that the financial sector is experiencing, alongside the regulatory and supervisory priorities it will set in response to them.

Looking specifically at the supervisory priorities, the Outlook details six cross-sectoral supervisory priorities and what it expects firms to do in response to these priorities. The priorities focus on:

• managing risk;
• being consumer-centric;
• resiliency;
• managing change;
• addressing climate change risk; and
• responding to operating framework deficiencies.

As regards insurance specifically, the following priorities were highlighted:

• review of reserving assumptions in light of higher inflation and interest rate scenario;
• review of governance and underwriting in sectors or lines of business that are subject to significant growth or risk-profile changes;
• focus on integration of climate change and sustainability considerations by (re)insurers, as well as on an assessment of the materiality of their climate risk exposures set out in the CBI climate guidance;
• research the flood protection gap and how it may change in the medium-to-long term owing to climate change;
• review the adequacy of governance arrangements where a branch in a third country is used to conduct regulated functions or activities;
• review the oversight of critical outsourcing relationships and the maturity of operational resilience frameworks;
• assess the impact of reinsurance market contraction on insurance business models;
• commence targeted reviews focusing on firms’ consumer protection risk management frameworks, health insurance renewal process, and customer service;
• continued involvement with EIOPA’s work on value for money in unit-linked investment products;
• deepen the understanding of innovation and digitalisation in the insurance sector; and
• ongoing risk-based supervision on underwriting and reserving practices, operational resilience, sustained improvement in culture, and a holistic approach to risk management.

Individual accountability

The IAF Act was enacted on 9 March 2023 and aims to support the advancement of an improved culture in the Irish financial system through greater accountability in the regulated sector. On 16 April 2024, the CBI published its final related Guidance on the IAF as well as a statutory instrument in relation to its Senior Executive Accountability Regime (the “SEAR Regulations”).

2024 was the year of embedding the IAF. Firms that fell within the scope of the SEAR Regulations had to be compliant by 1 July 2024. Looking ahead, confirmation of compliance with the certification process in respect of pre-approval controlled functions (PCFs) and controlled functions will apply from 1 January 2025, and independent non-executive directors and non-executive directors will come into scope from 1 July 2025. As stated previously, business standards are being considered as part of the CBI’s above-mentioned CPC review.

CBI publishes review of F&P regime

On 11 July 2024, the CBI published an independent review of its fitness and probity (“F&P”) regime that was carried out by former chair of the European Banking Authority Andrea Enria (the “Review”). It should be noted that the timing of the Review was partly due to a decision of the Irish Financial Services Appeals Tribunal in February 2024, which found several issues with how the CBI handled an individual’s application for a PCF role under the F&P regime, thereby confirming the importance of fair practices and procedures. In short, the Review found that the CBI’s practices are largely in line with other supervisors but made a number of recommendations, including:

• increased clarity as to the expectations of supervisory authorities;
• enhancement of the internal governance of the process; and
• greater effectiveness, transparency and fairness of the process.

At the time of writing (December 2024), it is expected that guidance to effect the recommendations will be published in 2025.

CBI takes enforcement action under Administrative Sanctions Procedure (ASP)

On 8 November 2024, the CBI issued a statement setting out the details of the first enforcement action taken by the CBI under the new ASP following the changes introduced by the IAF. The entity subject to this first enforcement action admitted the eight prescribed contraventions of the Alternative Investment Fund Manager Regulations and agreed to the CBI’s sanctions of a reprimand and monetary penalty of almost EUR400,000.

The second enforcement action was published on 21 November 2024, whereby the CBI issued a settlement notice in respect of a company’s breach of its safeguarding obligations under the European Union (Payment Services) Regulations 2018. The entity accepted the CBI’s sanction of a reprimand and monetary penalty of approximately EUR320,000.

Both enforcement actions are subject to confirmation by the High Court and will only take effect once confirmed.

CBI publishes thematic review for (re)insurance undertakings on climate change risk and a flood protection gap report

In March 2023, the CBI published its final Guidance for (Re)Insurance Undertakings on Climate Change Risk. It aims to clarify the CBI’s expectations on how (re)insurers address climate change risks in their business and to assist them in developing their governance and risk management frameworks to do this. In its September 2024 Insurance Newsletter, the CBI published the findings of its thematic review of the materiality assessments of 29 (re)insurers. This review illustrated that the majority of the firms have made some efforts to meet the guidance, including conducting a broad analysis of potential exposure to climate risk in various categories and outlining clear conclusions on the materiality of these risks.

In October 2024, the CBI published its Flood Protection Gap Report following engagement with key stakeholders, including members of the insurance industry and officials from the Department of Finance and the Office of Public Works. The key findings of the report were that Ireland is likely to see significantly more rainfall in the future due to climate change, which increases the likelihood of flood events and potentially widens the flood protection gap further. The CBI has stated that the flood protection gap remains a priority.

CBI publishes update to its regulatory and supervisory framework

In August 2024, the CBI announced an update on its plans for transforming regulation and supervision as previously set out in its Strategic Plan. The key features of this update include a new supervisory framework, which will remain risk-based and will have seven directorates that will report to the existing Deputy Governors for Financial Regulation and Consumer and Investor Protection, as follows:

• three directorates with responsibility for sectoral supervision – namely, the Banking and Payments Directorate, the Insurance Directorate, and the Capital Markets and Funds Directorate);
• the Horizontal Supervision Directorate;
• the Supervisory Risk, Analytics and Data Directorate;
• the Policy and International Directorate; and
• the Enforcement Directorate.

The CBI plans to implement these changes in early 2025, with further engagement with stakeholders as work progresses.