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Insurance Coverage

Dáil Éireann Debate, Tuesday - 15 September 2020

Tuesday, 15 September 2020

Ceisteanna (253)

Dara Calleary

Ceist:

253. Deputy Dara Calleary asked the Minister for Finance his views on insurance companies that are unwilling to compensate policy holders that have paid for specific business interruption cover in the event of an outbreak of infectious disease; the actions he has taken in respect of same; and if he will make a statement on the matter. [23364/20]

Amharc ar fhreagra

Freagraí scríofa

I am aware of the concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, including honouring business interruption claims. As such, I have considerable sympathy for such policyholders. However, neither I, nor the Central Bank can direct or require that insurers cover claims, including those resulting from infectious diseases such as COVID-19, nor can we adjudicate on the validity of such claims.

That being said, this is an issue that Minister of State Fleming and I continue to follow closely. Whether a business can make a claim in relation to COVID-19 related loss of earnings will depend on the specifics of their policy. In cases where there is infectious disease cover, there may be other considerations which will influence the decision of an insurer to not pay a claim.

Accordingly, it is important therefore for businesses to engage directly with their insurer or broker on these matters, and where they believe an insurer has incorrectly rejected their claim, they should either consider referring the matter to the Financial Services Ombudsman (FSPO) for adjudication or where their claim is in excess of the FSPO €3 million limit they may wish to consider legal action. I understand that this is already happening in a number of cases.

Both my Department and I have had considerable engagement with the insurance industry on the issue of business interruption claims over the past number of months. From the outset I have made it very clear that as a general rule insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage. They should engage with those impacted businesses honestly, fairly and professionally to honour those elements of the policies covered, in line with the Central Bank’s Consumer Protection Code. Furthermore, I have made it clear that the Government direction to close a business in the context of COVID 19 should be considered as such where a claim may be appropriate. I have also indicated to the insurance industry that adopting a “blanket” rejection of all business interruption claims, is doing the industry significant reputational damage and is not treating customers fairly. Most recently when Minister Fleming and I met with Insurance Ireland to discuss the Programme for Government’s ambitious insurance reform agenda, I continued to stress the need for an appropriate response from insurers.

Separately, the Central Bank’s Business Interruption Insurance Supervisory Framework sets out it’s expectations of insurance firms in handling COVID-19 related business interruption insurance claims. Where customers have an entitlement to claim under a business interruption insurance policy, the Bank expects that claims will be processed and paid promptly and fully. Significantly, where cover and related issues are disputed, the Bank expects firms to pay the reasonable costs of customer plaintiffs in agreed test case litigation. I welcome this move and I am aware that a number of test cases are due to be heard in the courts next month. The Central Bank 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.

The Deputy should be assured that Minister of State Fleming and I will continue to monitor the business interruption issue and will engage appropriately with the Central Bank on the matter. This issue is recognised in the Programme for Government’s extensive cross-Departmental insurance reform agenda, which amongst other things seeks to address consumer and business concerns on the cost and availability of insurance by building on the work of the Cost of Insurance Working Group.

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