Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputy. That is a perfect question and the exact question I raised when this issue came to light. What the Deputy has just said explains the current situation concisely and accurately. In practice, where a business had a loss of the order of €100,000, to use the example the Deputy gave, and there is State support through TWSS, CRSS or rates not being levied on that business for the period, there may only be a net loss of €75,000. The insurance company policies in many cases only require them to cover the net loss, rather than the gross loss.

When I came into this office last year, I spotted there was an issue here. I was conscious of the measures the Deputy mentioned in the Department of Social Protection that apply when somebody has a car accident, ends up being awarded the equivalent of €100,000 as a result of his or her injuries and, during the two-year period that is going through, receives State support through disability or other payments of the order of €20,000. In that situation, the insurance pays the net loss of €80,000 to the person and pays the €20,000 directly to the State. That works solely in that situation because there is legislation in place to deal with it prior to the event occurring. We have a scheme in place there but there is no such scheme available to cover this type of issue. Those recoupment measures were not envisaged for business interruption policies before Covid came along. Nobody envisaged that the State would support business interruption losses in the normal course of events but Covid changed that.

We would have liked if it was possible to backdate the effect of this so that we could get the benefits of the State supports refunded to us by the insurance companies. Unfortunately, the policies may have been issued a year or two in advance. That was a legally binding contract. There was no legal requirement as part of the schemes where the State made the payments to have a recoupment measure in place. We could not have made the legislation retrospective.

This is a lesson from Covid for the State. We are learning the lesson and want to implement it as early as possible. We will gather information on this for any future scheme. It could be any issue in the construction or agriculture industries or the environment or health areas. We will gather the information to know the extent of the issue and to build this recoupment measure into future legislation and schemes. However, it does not exist at the moment and we cannot make it retrospective.

The Deputy is right that, effectively, the taxpayer has subsidised parts of the insurance industry, which have not had to pay out the full gross loss and are using the State subsidy. We need to correct that. Many companies had themselves covered so that did not arise but one or two companies were in a position to use that situation. In head 3, we are gathering the information we do not have to be able to use it in future and lead to greater transparency. It will be published by the Central Bank as part of its regular reports. We will have that.

The second element of head 8 is that insurance companies will notify customers of the amount of deductions. We are introducing this as a new requirement immediately once the legislation commences. I have seen cases, for example, where there was a loss of €100,000 and the insurance company specified in the cheque they sent out that certain losses were made good by the State under various schemes and they listed those. In other situations, as happens in some personal injury cases, there is an all-in figure agreed of €100,000 as an overall settlement without breaking down the components of how that figure was arrived at. This legislation will ensure that information is separately shown and identified so the Central Bank can report to us and the customer will be aware in the beginning.

This is a lesson from Covid that we are learning for the future but, unfortunately, it cannot be backdated. I hope I am answering the question as best I can.