Written answers

Tuesday, 27 July 2021

Department of Finance

Insurance Industry

Photo of James O'ConnorJames O'Connor (Cork East, Fianna Fail)
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316. To ask the Minister for Finance if public liability insurance premia for the reopening of pubs will be refunded if further lockdowns occur (details supplied); and if he will make a statement on the matter. [39827/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, neither I, nor the Central Bank, have any influence over the pricing of insurance products, nor can we compel any insurer operating in the Irish market to provide refunds to their customers, as this is a commercial matter. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of their products. In addition, the Deputy will appreciate that it is difficult for me to comment on issues relating to situations that are hypothetical.

I can however comment on action that has been taken to date, and working to protect insurance policyholders during and after the COVID-19 crisis remains a priority issue for Government, and is therefore included within the Action Plan for Insurance Reform. Throughout the pandemic, Minister of State Fleming and I have consistently called on insurers to treat their customers honestly, fairly and professionally, in line with the Central Bank’s Consumer Protection Code. We have emphasised the importance of insurers supporting their customers during these difficult times by continuing to provide necessary reliefs, and responding to both the Government’s insurance reforms and the pandemic by lowering premiums.

Minister of State Fleming has had extensive engagement with insurers on these points, including a series of meetings in April at which he pressed the need for premium reductions in light of the new Personal Injuries Guidelines,which have significantly lowered award levels. He outlined that upon renewal, the Government expects premiums to reduce for all classes of insurance, including public liability insurance, and that insurers should now consider increasing their risk appetite to provide increased cover in new areas.

This engagement was positive, with insurers indicating that they will lower premiums in response to the Guidelines. It is Minister of State Fleming’s intention to meet with insurers again in the autumn to review progress in this regard. The issue of COVID-19 forbearance measures was included on the agenda for these meetings, and I understand that a number of firms indicated that they will also take account of COVID-19 restrictions when setting premiums.

I am pleased to note that most of the main insurers operating here have twice renewed their commitment to forbearance measures announced by several members of Insurance Ireland last year. These include a number of measures directed at businesses, such as maintenance of existing cover where premises are closed or unoccupied. I believe it is important that insurers now take a long term view towards supporting their customers, as we work to restart the economy and recover from the impact of the pandemic. Both Minister of State Fleming and I will remain proactive in engaging with the insurance industry on this matter, as well as working with colleagues to implement further key reforms, which I hope will go some way to improving the cost of insurance for all businesses, including those in the hospitality sector.

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