Irish Central Bank: We’ll Act Against Insurers Who Don’t Pay COVID-19 Claims

DUBLIN — Ireland’s central bank governor told insurers to urgently honor and pay valid claims related to COVID-19 disruption, following a successful test case in court last week, or risk facing legal action by the regulator.

Ireland’s High Court ruled on Feb. 5 that four publicans insured by FBD were entitled to be indemnified for losses under lockdown-linked claims, in a case that could have implications for over 1,000 similar contracts for FBD alone.

Gabriel Makhlouf said a number of insurers had already accepted and begun settling business-interruption claims as a before the court judgment in Dublin, as well as one in London.

However he said the central bank had been clear that where a relevant court outcome has a beneficial impact for similar customers, insurers should ensure those customers benefit and where there is doubt, interpret in favor of policyholders.

“In short, insurers must adopt a customer-first approach to the resolution of these issues and where they fail to do so, the Central Bank has taken and will take appropriate action, using all our legal powers as appropriate,” Makhlouf said in a speech.

“Let me make it clear to the insurers involved: we’ve been clear with you. The UK courts have been clear with you. And now the Irish courts have been clear with you. Any continuing failure to do the right thing by your customers is inexcusable and we won’t hesitate to take action accordingly.”

The government has welcomed the court ruling but the main opposition party, Sinn Fein, repeated a call for the regulator to open a system-wide investigation similar to its years-long probe into the overcharging by banks of some mortgage customers.

“I am calling on the central bank to intervene on behalf of policyholders who they are mandated to protect and examine business interruption insurance policies,” Sinn Fein finance spokesman Pearse Doherty said in a statement.