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Law360, London (March 30, 2020, 12:35 PM BST ) Irish insurers must put consumers first when assessing claims connected to the coronavirus outbreak, the Central Bank of Ireland has said after being called on to intervene by a lobby group.
The central bank said in a letter to chief executives on Friday that insurers must come up with "consumer-focused solutions on policy payment breaks, rebates and claims." Insurance companies must choose the interpretation that is most beneficial to the consumer when a policy is open to interpretation, the letter continued.
"Our clear expectation is that firms should act honestly, fairly and professionally and in the best interests of their customers," Derville Rowland, director general of financial conduct at the central bank, said. "We expect firms to provide reasonable arrangements to support such customers in their dealings with firms at this difficult time.''
The bank said that recent government advice to close businesses should be treated by insurers as a "direction," meaning that losses resulting from a government direction will be covered.
The central bank also directed insurers to ensure that all claims are assessed appropriately and paid promptly. They must also communicate with consumers clearly about what they are and are not covered for.
Insurers should also alert consumers to policy terms and conditions that may be beneficial to them.
"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," Rowland said.
The central bank also said that chief executives must take responsibility for how their companies respond to claims during the COVID-19 crisis.
"We are insisting that the CEOs of Irish authorized firms and senior management of firms passporting in to Ireland shall 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," Deputy Governor Ed Sibley said.
Insurers must make sure their customer service departments are well staffed and able to respond to questions appropriately, the central bank said.
The letter said that the central bank expects firms to "have processes in place to engage positively with customers who are experiencing difficulties in the payment of premiums because of COVID-19."
The instructions come after an Irish pressure group criticized a refusal by insurance companies to pay out on claims for losses caused by business interruption over the coronavirus outbreak. The Alliance for Insurance Reform urged the country's central bank to step in.
Regulators and lawmakers across the U.K. and Europe have stepped in to make sure the COVID-19 crisis is handled appropriately by insurers.
British lawmakers urged insurers on Thursday to clarify their positions on coverage during the coronavirus outbreak, as losses caused by the pandemic mount and confusion spreads among consumers.
Britain's Financial Conduct Authority wrote to insurers this month urging them to show fairness and flexibility when assessing claims related to the coronavirus.
--Additional reporting by Martin Croucher and Najiyya Budaly. Editing by Ed Harris.
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