Insurers have been rebuked for “voiding” policies on the basis of non-disclosure.
Ireland’s Financial Ombudsman Service said it had received 1843 complaints related to insurance, around 33% of the total number.
Ger Deering, the head of the country’s FOS, said insurance companies in Ireland were continuing to void policies “in a manner which I consider to be unreasonable and disproportionate”.
He added: “Where a person has an insurance policy cancelled by an insurance company due to alleged non-disclosure, or for whatever reason, this can have serious implications and render it very difficult, and in some instances almost impossible, for that person to get any sort of insurance cover subsequently.
“I firmly believe the voiding of an insurance policy is something that should not be done lightly.
“To avoid the risk of non-disclosure and the potential voiding of policies, I hold the view that insurance companies and insurance intermediaries should ask questions prior to the inception of a policy in a clear manner and ensure that customers are clear on what they are being asked and the potential consequences of answering incorrectly.”
The UK FOS did not immediately respond to a request for comment on whether its own complaints data tallied with that of its Irish counterpart on the issue.
In advice, dated from 2005 on its website, the UK FOS cites guidance from the Association of British Insurers over non-disclosure.
It says: “In deciding whether to avoid a policy, insurers should rely only on the answers given or withheld. They should also only avoid policies where the non-disclosure or misrepresentation was deliberate or reckless, not where it was innocent.
“The ABI made it clear that customers were required to answer questions only to the best of their knowledge and belief.”
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