At the outset, I believe it is important to state that neither I, as Minister for Finance nor the Central Bank, can compel insurers to provide rebates for public liability insurance and employer liability insurance for those businesses forced to close due to restrictions put in place to prevent the spread of COVID-19 to their customers. This said, I 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, particularly in terms of forbearance and other flexible measures being offered to them. My officials and I have been engaging with the sector in an effort to get some much needed certainty for business policyholders.
I wrote to Insurance Ireland on 27 March requesting that it press its members to provide some reliefs to their customers to alleviate the pressures brought on as a result of the current situation, and for insurers to have a common approach on how they are supporting their business customers in this difficult time. The outcome of this engagement is an agreement that I announced on 10 April whereby most of the key insurers in the Irish market - namely Allianz, AIG, AXA, FBD, Liberty Insurance, RSA, Travelers Insurance and Zurich - will apply the following common measures which will be available to their business customers:
Forbearance
- Insurers will reduce premiums for business customers to reflect reduced level of exposure as a result of COVID-19 restrictions for Employer Liability/ Public Liability and Commercial Motor.
- Insurers will allow up to 28 days after renewal for payment.
Business Premises
- Insurers will maintain cover for unoccupied commercial buildings/ premises not in use due to COVID-19 restriction (for a maximum of 90 days). Appropriate supervision and security of the premises is required.
- Insurers will support requests for a change of property use during the crisis.
I believe that it is imperative that insurers implement these measures wholeheartedly and without causing difficulties to their customers. The focus of my engagement to date has been with Insurance Ireland, noting that a number of its members have UK-based parent companies including one particular company who cover play centres. Despite my Department actively engaging with Insurance Ireland on that matter, the company has not signed up to this agreement. My Department continues to engage with Insurance Ireland on this matter.
In relation to those insurers who are not members of Insurance Ireland including UK insurers, my understanding is that they are aware of this forbearance arrangement, however have made the decision not to apply it for their own particular reasons. It should be noted that I have no influence over these companies in relation to their day to day commercial decisions, however I have asked my officials to consider how best they could engage with such companies to see if they could reconsider their position and participate in the forbearance arrangement or a similar arrangement that would assist their Irish customers.
In terms of the role of the Central Bank on this matter, the Deputy should note that the Central Bank has written to insurance firms with Irish consumers, irrespective of where the firms are prudentially regulated. The Bank requires firms to have processes in place to engage positively with customers who are experiencing difficulties in the payment of premiums because of COVID-19. The Bank also expects insurance firms to take account of the difficult and challenging situation in which many customers find themselves. The Bank has also stated that, as a matter of urgency, firms should develop consumer-centric solutions to the handling of insurance payment breaks and policy rebates in light of the COVID-19 emergency.
As stated at the outset, the Central Bank has no mandate to instruct insurers to issue rebates. Additionally, the Central Bank does not have a mandate for investigating individual policyholder complaints or making determinations on the interpretation of policy wordings; these powers belong to the Financial Services and Pensions Ombudsman (where appropriate) and ultimately the courts. Nonetheless, as part of a wider programme of supervision which commenced in March, the Central Bank is continuing to engage with the larger insurance firms to ascertain their approach to dealing with specific elements of COVID-19.
Finally, I would like to assure the Deputy that my Department will continue to be as pro-active as it can be on these issues and will continue to liaise with the Central Bank, Insurance Ireland and others, as appropriate, on an ongoing basis.
