Dáil Éireann Debate, Wednesday - 19 January 2022
337. Deputy Mick Barry asked the Minister for Finance if he will seek funds from insurance companies who have deducted State supports from insurance claims made by small businesses; and if he will make a statement on the matter. [1734/22]
View answerI am aware of the issue around certain insurers seeking to deduct the value of particular Government supports from claims payouts linked to the COVID-19 pandemic. At the outset, it is important to note that such deductions may arise in accordance with the principle of indemnity, under which an insured party who has suffered a loss is restored, in so far as possible, to the same financial position that they were in immediately prior to this event. In addition, this practice must be considered on a case-by-case basis, as individual policy wordings could provide a contractual basis for making such deductions.
My officials have considered various options to address this issue. As recently noted by Minister of State Fleming at the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, any retrospective recoupment of amounts deducted by insurers would be difficult to implement from a legal perspective. Separately, it is my understanding that the issue of Government grants is expected to be addressed as part of a ruling on quantum in the ongoing business interruption test case, which remains before the Courts, and on which it would be inappropriate to comment further at this time.
In light of these considerations, it was decided that the appropriate way to address this issue is to increase the transparency around the deduction of State supports from claims settlements. The Insurance (Miscellaneous Provisions) Bill, which is currently being drafted, will make amendments to existing legislation to enable the Central Bank to collect data on such deductions by insurers through the National Claims Information Database (NCID). This will greatly enhance policymakers’ understanding of the prevalence of this practice, and will provide an important evidence-base for taking any further action in this area, if necessary, in order to protect taxpayers’ interests. In addition, the Bill will create a new requirement on insurers to notify consumers about any such deductions made to claims settlements.
I believe that this is a proportionate and appropriate response to this issue, which will avoid unintended consequences and will not pre-empt any legal ruling on the matter. I expect the draft Bill to be published early within this quarter, and I look forward to working with colleagues to progress it through the Oireachtas to complement the Government’s ongoing work on insurance reform.
