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. I have considerable sympathy for such policyholders, however the Deputy should note that neither I, nor the Central Bank, have any influence over the pricing of insurance products, nor can we compel any insurer operating in the Irish market to provide cover, as this is a commercial matter for insurers. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from adopting rules, which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
Notwithstanding the above, my officials and I have had extensive engagement with the insurance industry over insurance cover and reliefs for businesses during the COVID-19 emergency. 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 ensure that a number of common forbearance measures are available to their business customers. It should be noted that this is a voluntary agreement, but my views are that the other major insurers in the Irish market should also sign up to this commitment.
The common measures included in the agreement are outlined below:
- 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.
- 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.
While I believe that the above agreement should assist many businesses in relation to their insurance, this will only happen if insurers deliver upon their commitments. Therefore, I asked Insurance Ireland to put in place a mechanism which provides proof of delivery. My Department received the first “Activity Report” on this issue from Insurance Ireland on 25 May. This Report shows that in the period 23 March to 4 May, Insurance Ireland members processed 4,093 forbearance requests for business customers worth a total of €5,242,349. I have asked my officials to seek more detailed information from Insurance Ireland on the nature of the forbearance being offered. It should also be noted that my Department is in regular touch with the Alliance for Insurance Reform on these and other insurance matters.
The Deputy should be aware that the Central Bank has written to insurance firms setting out their expectations that insurance firms should 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.
I have set out already to the House that I strongly believe that insurers should treat their customers honestly, fairly and professionally and in line with the Central Bank’s Consumer Protection Code. However, neither the Central Bank nor I have any role in adjudicating on matters such as price increases nor other issues such as complaints. I encourage consumers to engage directly with their broker or insurer regarding forbearance measures and other reliefs. 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. through use of a firm’s internal complaint process or recourse to the Financial Services and Pensions Ombudsman or litigation.
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 and Insurance Ireland on an ongoing basis.