The Consumer Insurance Contracts Bill 2017, introduced as a private member’s bill by Sinn Féin finance spokesperson Pearse Doherty TD, is now expected to be signed into law by Christmas.

Mr Doherty said the bill “will shift the balance in favour of policyholders, by increasing transparency and strengthening the hand of the policyholder during their insurance contract”.

He added: “It is the only legislation that has been passed since 2016 that focusses on policyholders, increasing their protections.”

The Alliance for Insurance Reform, which supported the legislation, called it a “game-changer”.

Mr Doherty said: “From now on, where there is uncertainty in any document or contract, the rule of law and interpretation in favour of the consumer will prevail.

“From now on, it will be up to the insurer to ask the relevant questions when a consumer or business takes out a policy, reversing the current status quo which places the burden and responsibility on the consumer to volunteer information.

“Companies will no longer be able to easily settle third party claims without the policyholder knowing. They will have to inform customers of any claim made against their policy, allowing them to submit their own evidence and informing them of the cost of any claim against their policy that has been settled.”

Speaking in the Dáil, Michael D’Arcy, minister of state in the Department of Finance, said: “We all have a part to play in insurance reform. There are too many vested interests who put themselves first. It is not good enough that customers and consumers come last with regard to insurance.

“This important legislation will put the consumer first and at the top of the queue instead of at the back of the queue. The vested interests include the insurance companies. Sections of the law profession and the legal world are looking after themselves as well.

“All the legislation that is being introduced in this area will put us in a better position.”