Fianna Fáil spokesperson on Business, Enterprise and Innovation, Robert Troy, has said it is unacceptable that some insurance companies are still using every avenue and technicality to get out of their obligation to pay out on legitimate claims.
Deputy Troy wrote to Minister for Finance Paschal Donohoe in advance of his meeting with Insurance Ireland last week, to seek assurances on what oversight will be put in place to ensure the insurance sector lives up to the commitments they have given. He also asked that a fast-tracked dispute mechanism be implemented.
He explained: “Recently, insurers agreed that Government advice to close a business to combat the spread of coronavirus would be treated as a direction to close. They also said they will offer forbearance in the form of policy suspensions, rebates and extensions.
“In the first instance I want to know who is going to police the forbearance issues, there needs to be mechanisms put in place to ensure that the insurance sector lives up to the commitments they have given in this area.
“In the UK the Financial Conduct Authority has ordered insurance companies to pay out claims to firms as quickly as possible or explained themselves to the watchdog.
“This kind of oversight is necessary here because there are still some insurance companies that are using every avenue and technicality to get out of their obligation to pay out on legitimate claims,” he claimed.
“I acknowledge that not all claims are legitimate, while not all business policy holders have got business interruption cover for infectious diseases. However, those policy holders that did take the extra prudence and took out this cover would have a genuine claim.
“One way to deal with this would be to resource the Financial Services and Pensions Ombudsman (FSPO ) to allow it offer a fast-tracked appeals process for businesses that have been refused cover.
“Businesses should be able to fast-track complaints by using a hybrid model of the current 12-week Dispute Resolution Service, which is not legally binding and a formal investigation. A formal investigation is legally binding and can take up to 12 months to complete.
“This hybrid model would mandate that the decision of the 12-week Dispute Resolution Service would be legally binding, while the current limit in place for turnover would be increased to over €3 million. This would ensure that all businesses impacted could avail of the proposed fast-tracked dispute mechanism.
“The Minister needs to get the agreement of the insurance industry to this hybrid model. He should put in place adequate resourcing for the FSPO to meet the additional work that might arise as a result.
“This is a workable solution which I hope he brings to his meeting with Insurance Ireland,” Deputy Troy concluded .