Dáil Éireann Debate, Wednesday - 27 May 2020
54. Deputy Charlie McConalogue asked the Minister for Finance the details of his discussions and conclusions made with the insurance industry on compensating businesses with disruption cover for infectious diseases on the need to honour business interruption claims; and if he will make a statement on the matter. [7312/20]
View answerI am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and also with regard to whether forbearance and other flexible measures are being offered to them.
I and my officials have been engaging with the sector in an effort to get some much needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on the 27th of March and indicated amongst other things the following:
(i) insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage.
(ii) that where a claim can be made because a business has closed, as a result of a Government direction due to contagious or infectious disease, that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.
Insurance Ireland, on behalf of its membership, responded on the 3rd of April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close.
Following on from my correspondence, I held a teleconference with Insurance Ireland, on the 17th of April, where I reiterated that some insurers, by adopting a “blanket” rejection of all business interruption claims, were doing the industry significant reputational damage and were not treating customers fairly. I also discussed a range of other insurance related matters on the teleconference, including motor insurance premium refunds, and a statement outlining the nature of my engagement with Insurance Ireland was issued by the Department and can be found here:
https://www.gov.ie/en/press-release/edabf2-minister-donohoe-emphasises-his-concerns-to-insurance-ireland-regard/
In addition, the Deputy should note that the Central Bank of Ireland (CBI) wrote to the CEOs of major insurers outlining its expectations of them in this crisis from a consumer protection perspective. The key messages that the Bank conveyed are as follows:
- Insurers must put forward consumer-focussed solutions on policy payment breaks, rebates and claims.
- While most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail.
- The Central Bank expects the CEOs of Irish authorised firms to take responsibility for the oversight of how their firm is managing determinations of whether claims are covered or not in the context of COVID-19.
The CBI is continuing to engage with the non-life insurance industry on these matters and will continue to closely monitor the situation to ensure that firms are meeting the expectations as previously set out.
In conclusion, I have set out already to the House that I strongly believe that insurers should treat their customers honestly, fairly and professionally and honour those elements of the policies covered including business interruption claims in line with the CBI’s Consumer Protection Code. However, I cannot compel insurers to pay business interruption claims and neither I, as Minister for Finance, nor the Central Bank, have any role in adjudicating on such matters. If there continues to be a disagreement between an insurer and a policyholder, then the appropriate channels for resolving them must be followed i.e. bringing the matter to the attention of the Financial Services and Pensions Ombudsman or seeking to go down the litigation route. In this regard, I note that a number of legal actions have been initiated by some publicans. Notwithstanding these constraints, my officials are maintaining regular contact with Insurance Ireland on this and other issues and are keeping me updated on developments. Furthermore, I have also recently indicated in the Dail, that I intend engaging again directly with Insurance Ireland in the near future.
