Central Bank of Ireland sets out Expectations of Insurers in Light of COVID-19 Emergency

• Insurers must put forward consumer-focused solutions on policy payment breaks, rebates and claims 
• 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 expects the CEOs of Irish authorised firms 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.

The Central Bank of Ireland has today set out its expectations of how regulated insurance firms should treat their customers in light of the significant economic disruption caused by the COVID-19 public health emergency.

The Central Bank has written to the Chairs and CEOs of both life and general insurance firms requiring them to take account of the challenging situation in which many of their customers find themselves and to put forward consumer-focused solutions for insurance payment breaks, policy rebates and claims in light of the emergency.

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.  This is a view that has also been set out by the Minister for Finance, Public Expenditure and Reform.  Firms must ensure that claims are appropriately assessed and where there is insurance cover in place that claims are accepted and paid promptly.

Where relevant, firms must proactively communicate in a clear, transparent manner to customers about the levels of cover provided by individual insurance policies including informing them, when renewing existing policies, if there are any changes to those policies arising from COVID-19. 

Firms must ensure that their customer-facing functions are adequately resourced to ensure that customer needs are met and queries are handled in an appropriate timeframe and that they have processes in place to engage positively with customers who are experiencing difficulties in the payment of premiums as a result of COVID-19.

Firms must also engage with their intermediaries and partners to keep them fully informed at all times about the implications of COVID-19 for existing and new policies.
In relation to insurance claims, firms must ensure that they are fully compliant with the Central Bank’s Consumer Protection Code 2012 and all other relevant regulatory requirements. Any claim settlement offer made to a claimant must be fair, must take into account all relevant factors and must represent the firm’s best estimate of the claimant’s reasonable entitlement under the policy.

Firms must ensure that they handle claims effectively and properly and where appropriate to do so they must offer to assist their customers in the process of making a claim, including, where relevant, alerting the claimant to policy terms and conditions that may be of benefit to the claimant. Although the Central Bank expects that  most policy wordings are clear in terms of what cover is provided and what is excluded, where there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail.

In the case of Irish authorised insurance undertakings, the CEO of each firm 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. Where the firm is passporting into Ireland, senior management will be expected to take that responsibility.

Derville Rowland, Director General, Financial Conduct said: “Our clear expectation is that firms should act honestly, fairly and professionally and in the best interests of their customers.  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.’’

Deputy Governor Ed Sibley said: “At all times, the Central Bank expects Boards and firms to consider the consumer impact when making decisions and to engage with customers in an open, fair and transparent manner. This is of increased importance for the duration of the COVID-19 situation. That is why we are insisting that the CEOs of Irish authorised 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.’’