Éamon Ó Cuív (Galway West, Fianna Fail)
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76. To ask the Minister for Finance the discussions he has had with the insurance industry in relation to the refusal by insurance companies to honour business interruption policies in insurance policies in circumstances in which insurance includes cover for infectious diseases; the result of these discussions; and if he will make a statement on the matter. [13629/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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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, in terms of honouring business interruption claims and with regard to whether forbearance and other flexible measures are being offered to them. I have considerable sympathy for such policyholders.

Whilst I have no legal authority to compel an insurer to pay a claim as this forms part of a contract between the insurer and the policyholder, I believe that as a general rule insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage.  I believe that they should  engage with those businesses honestly, fairly and professionally to honour those elements of the policies covered, in line with the Central Bank’s Consumer Protection Code. The Deputy should note however that neither I, as Minister for Finance, nor the Central Bank have any role in adjudicating on such matters.  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. use of the Financial Services and Pensions Ombudsman or litigation.

The above said however, my officials and I have been engaging with the sector in an effort to get some much-needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on 27 March and indicated amongst other things that

(i) insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage; and,

(ii) that where a claim can be made because a business has closed as a result of a Government direction due to contagious or infectious disease, that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.

Insurance Ireland, on behalf of its membership, responded on 3 April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close.  Following on from this correspondence, I held a teleconference with Insurance Ireland, on 17 April, where I 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. 

The Deputy should also note that the Central Bank wrote to the CEOs of major insurers outlining its expectations of them in this crisis from a consumer protection perspective. This included the Bank’s belief that while most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail. 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.

In terms of meeting again with industry, my officials are in regular contact with Insurance Ireland on the above matters and are keeping me updated on developments.

Finally, it is also worth noting I have also held two meetings with the Alliance of Insurance Reform, the latest meeting which took place on 17 June.  These meetings were very useful as I was able to hear first-hand the issues faced by businesses in relation to insurance.

In conclusion, I would like to assure the Deputy that my Department will continue to be as pro-active as it can be on these insurance issues and will continue to liaise with the Central Bank and Insurance Ireland, as well as the Alliance for Insurance Reform on an ongoing basis.