Dáil debates

Wednesday, 29 July 2020

Saincheisteanna Tráthúla - Topical Issue Debate

Insurance Industry

10:10 pm

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

Go raibh míle maith agat, a Cheann Comhairle. I thank Deputy Dillon for raising this matter. In his contribution, he outlined the importance of the issue of insurance cover during the Covid-19 pandemic and the difficulties people are experiencing with many of the insurance companies upon which we have relied over many decades. This is an issue which is cropping up all over Ireland. He has highlighted some particular issues with regard to the retail sector. What he has said about towns in Mayo is reflected across every town, village and city in the country.

I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its policyholders in these difficult times, including with regard to honouring business interruption claims. The Government has been fully engaged with the sector on insurance matters since taking up office and will continue to be so engaged. However, I have to be straight, fair and upfront; what the Government can do and what it cannot do is clear. Neither the Minister for Finance, myself as Minister of State with responsibility for insurance nor the Central Bank can direct or require that insurers cover particular claims, including those resulting from infectious diseases such as Covid-19. Furthermore, it is not a matter for the Government or Central Bank to adjudicate on the validity of such individual claims.

Having said that, whether a business can make a claim in respect of loss of earnings because of closure due to Covid-19 depends on the specifics of its policy.

I understand that many businesses do not routinely have infectious diseases covered as part of their policies. In addition, many of those with such cover only cater for a schedule of listed diseases, and if such diseases manifest themselves on or in the proximity of the insured premises. Even in the case where infectious diseases such as Covid-19 are covered, there may be other considerations that will influence the decision of an insurer to pay a claim or not. It is important therefore for businesses to engage directly with the insurance broker on this matter.

Where a business believes that an insurer has incorrectly rejected a claim, it should either consider referring the matter to the Financial Services Ombudsman, FSPO, for adjudication or, where the claim is in excess of the FSPO €3 million limit, it may wish to consider legal action. We know many small businesses would find that very difficult but I understand that this is already happening in a number of cases.

Notwithstanding what I said at the outset, the Government has engaged with the sector and we have made it clear that insurers should not attempt to reject business interruption claims on the basis of interpreting policies to their own advantage. The Minister for Finance, Deputy Donohoe, following on from correspondence with Insurance Ireland in March, held a teleconference with it on 17 April where he reiterated that some insurers, by adopting a blanket rejection of all business interruption claims, were doing the industry significant reputational damage and were not treating customers fairly.

It should be noted that the Central Bank has also been directly engaging with insurers on business interruption claims and as a first step, wrote to the CEOs of all the major insurance companies in Ireland. The Department of Finance has kept in touch with the Central Bank on this matter and in a call last week, it indicated that it is doing everything within its power to ensure that insurers comply with their legal obligations in relation to business interruption. In this regard, it is undertaking a programme of supervision and engagement with the larger insurance firms to ascertain their approach to dealing with specific elements of Covid-19, including business interruption claims. The Central Bank has indicated that this is a very significant role for it.

The Deputy should also note that the Minister, Deputy Donohoe, and I met earlier today with Insurance Ireland to discuss a range of insurance issues, and business interruption formed a significant part of the discussions.


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