Final Phase of CICA Brings New Protections for Innocent Co-Insureds

The landscape of Irish insurance law is set to complete its most significant transformation in over a century with the commencement of the final section of the Consumer Insurance Contracts Act 2019. Expected to take effect on 13 May 2026, the implementation of Section 18(4) marks the conclusion of a sweeping legislative overhaul designed to dismantle historical imbalances between powerful insurance companies and everyday policyholders. For claims handlers, legal professionals, and consumer advocates across Ireland, this final piece of the legislative puzzle introduces vital protections for innocent parties while compelling insurers to rigorously review their consumer policy wordings and claims processes.

A Century in the Making

To understand the gravity of Section 18(4), one must look at the broader context of the Consumer Insurance Contracts Act 2019, commonly referred to as CICA. Prior to its enactment, Irish insurance contracts were heavily governed by archaic principles dating back to the eighteenth and nineteenth centuries. These outdated legal doctrines often heavily favoured the insurer, placing stringent and sometimes unforgiving duties of disclosure on the consumer. CICA fundamentally shifted this dynamic, replacing the draconian duty of utmost good faith with a more balanced framework that places greater responsibility on insurers to ask clear, specific questions. Signed into law on 26 December 2019, the Act was rolled out in phases to allow the industry time to adapt. The majority of its provisions came into force in September 2020, followed by further sections in September 2021. However, Section 18(4) was notably absent from these initial commencement orders, delayed by complex drafting issues that required further legislative intervention from the Oireachtas.

Protecting the Innocent Co-Insured

At its core, Section 18(4) addresses a deeply distressing scenario in property insurance claims: the penalisation of an innocent policyholder for the malicious or criminal actions of a co-insured. Historically, if a joint policyholder committed an intentional act of destruction—such as arson on a family home or a jointly owned business premises—the insurer could invoke a criminal act exclusion to void the entire claim. This left the innocent co-insured with absolutely nothing, often exacerbating an already traumatic situation. This legal reality disproportionately affected vulnerable individuals, including victims of domestic abuse whose partners intentionally damaged jointly owned property as an act of financial control or malice. Under the newly commenced provisions of Section 18(4), an exclusion for loss or damage to property caused by a criminal or intentional act can only be applied to the individual who actually caused, abetted, or consented to the loss. The claim of an innocent co-insured on the same policy remains valid and fully protected. This nuanced approach ensures that the fundamental principles of fairness and equity are upheld in the claims resolution process, aligning Irish insurance practices with modern societal expectations and international best practices.

Resolving the Legislative Loophole

The delay in commencing Section 18(4) was not born out of political reluctance, but rather a necessary pause to prevent unintended and potentially disastrous consequences for the broader Irish insurance market. Legal experts and industry bodies quickly identified that the original language drafted in 2019 was exceedingly broad. The initial provision stipulated that criminal act exclusions would only apply to exclude cover for the person whose act or omission had caused the loss or damage, explicitly noting this applied whether the perpetrator was an insured party or another person entirely. This specific phrasing created immense practical difficulties regarding standard industry exclusions. For instance, policies routinely exclude cover for damage arising from war, terrorism, or large-scale civil unrest—events inherently caused by third-party wrongdoers. Under the original 2019 wording, Section 18(4) could have inadvertently nullified these standard exclusions, forcing insurers to cover unquantifiable risks that fall far beyond the intended scope of a standard consumer policy. To rectify this critical error, the provision was carefully amended by Section 9 of the Insurance (Miscellaneous Provisions) Act 2022. The revised legislation successfully narrowed the focus, replacing the problematic paragraph to ensure it strictly targets the issue of co-insured fraud and intentional damage without dismantling essential, internationally recognised third-party exclusions.

Implications for the Irish Claims Landscape

As the 13 May 2026 commencement date approaches, the Irish insurance industry faces a strict compliance deadline. Insurers operating within the State must conduct comprehensive audits of their policy wordings to ensure absolute alignment with the amended CICA provisions. Any ambiguity in how criminal act exclusions are phrased could lead to adverse rulings by the Financial Services and Pensions Ombudsman (FSPO) or the Irish courts. The FSPO, which serves as the primary avenue for consumers disputing rejected claims, will now have a robust statutory footing to enforce these specific protections for innocent co-insureds. For claims departments, this statutory change necessitates a significantly more sophisticated approach to investigating property damage. Loss adjusters and claims investigators will need to meticulously differentiate between the actions of individual co-insureds, gathering precise evidence to ensure that innocent parties are not unfairly prejudiced during the claims process. Ultimately, the full activation of the Consumer Insurance Contracts Act 2019 represents a monumental victory for consumer rights in Ireland. By closing this final legislative loop, the State has solidified a modern, transparent, and equitable insurance framework that protects the vulnerable while maintaining the commercial viability of the sector.