Central Bank warns insurance companies to interpret Covid-19 claims in favour of the customer
The Central Bank has warned insurance companies that the government's advice to close businesses to prevent the spread of Covid-19 should be treated as a direction.
It follows fears that thousands of pubs, restaurants and businesses who shut their doors to comply with the Government's request could have their insurance claims rejected because they closed voluntarily.
However, in a letter to the CEO's of insurance firms, the Central Bank said that while most insurance policies are clear, if there is a doubt about the meaning of a term, they must interpret the policy in favour of the consumer.
"Where a claim can be made because a business has closed as a result of a Government direction due to contagious or infectious disease, the Central Bank is of the view that that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction," the Central Bank's Director-General for Financial Conduct Derville Rowland said.
"Firms must ensure that claims are appropriately assessed and where there is insurance cover in place that claims are accepted and paid promptly."
The Irish Examiner reported this week that the Restaurants Association of Ireland was considering legal action against insurance companies refusing to pay out on policies.
The Central Bank also said it wants the CEOs of each firm to take responsibility for the oversight of how their firm is managing determinations of whether claims are covered or not in the context of COVID-19.
"In particular, firms need to be sensitive to changes in consumers’ circumstances due to the public health measures taken to counter the spread of COVID-19, which have left many in a financially vulnerable situation. We expect firms to provide reasonable arrangements to support such customers in their dealings with firms at this difficult time.’’
