Extraordinary foot dragging by insurance companies on premium reduction cuts
19 May 2021
- Minister Fleming needs to enact legislation to prevent companies profiting from state supports by reducing business interruption payouts
Speaking after a public hearing of Joint Oireachtas Committee on Finance and Public Expenditure Committee attended today by FBD, Aviva and Zurich insurance, committee member Labour Senator Marie Sherlock said the foot dragging by insurance companies on premium reduction cuts must end now and that the extraordinary situation where insurers are effectively pocketing the benefit of State supports must be stopped.
Senator Sherlock said:
“The Government needs now act to ensure that insurers do not profit from state supports. Businesses have told us that when paying out under business interruption cover, insurers are deducting the value of the state supports paid to businesses when they were forced to shut during the pandemic. This effectively amounts to an indirect state subsidy to insurers. While Aviva confirmed that they will not be deducting state supports from their pay outs, both FBD and Aviva are waiting to see if the Government will act.
“Minister Fleming must act now and legislate to prevent these companies profiteering at the expense of the state. There is now an extraordinary situation where insurance companies are obliged by law in personal injury cases to reimburse the State for any state payments arising from loss of earnings in the event of a personal injury. Yet insurers get to make up their own rules when it comes to business interruption insurance. Despite Minister Fleming’s public call to insurers on this issue, representatives from three insurance companies today confirmed they have yet to meet the Minister. Together with my colleague Deputy Ged Nash, we’ll be writing to the Minister asking him to bring forward legislation as soon as possible.
“Furthermore, the delays in passing on insurance premium reductions is simply unacceptable. As my colleague Labour Finance spokesperson Ged Nash has said, for years insurance companies have promised reduction in premiums if court pay outs were to be introduced. Judicial guidelines in this regard were enacted on April 24th, yet customers are still waiting for reductions, with some companies now disgracefully seeking to raise the bar for when they will react. Some firms are even suggesting that they will await the outcome of the court decisions. This is simply unacceptable behaviour.
“The comments made by FBD and Zurich at Committee today should sound alarm bells in Government buildings. It is atrocious to see such levels of corporate greed. We have seen the lack of care these firms have. Regulation is needed to ensure that we recoup state supports from insures who have paid out on businesses interruption claims.”