Insurance companies can't be 'let off the hook' for business interruption payments

Insurance companies cannot be "let off the hook" for Covid-19 business interruption payments and should repay the state, a minister has said.

Sean Fleming, Minister of State at the Department of Finance, is responsible for Irish policy in financial services, credit unions, and insurance and says that insurance companies should repay the state if businesses that were closed in the pandemic received government supports like the wage subsidy scheme or rates waivers.

"In these cases where a company has got payment from the state, the insurance company cannot be let off the hook, and reduce their total payments in respect of that claim," he said. He added that the job of the government is not to subsidise the profits of the insurance companies in a Covid situation.

"If you take the situation before Covid, if somebody was involved in an accident and it was agreed that the total settlement that they should get for loss of income and injuries, for example was €100,000 which during the course of a couple of years, the state had paid out, maybe €20,000 by way of disability to the individual, the insurance company would pay the balance, which would be €80,000.

"Now, the Covid claims are new but that is the principle I would like to see carrying through." Mr Fleming added that the government would want to reinvest the money that comes back from the insurance companies into the sectors which were affected.

"I wouldn't expect the state just to pocket that money either. I think if we do get that money, it should be given back to the sectors that were affected by it," he said.

Mr Fleming said there are already arrangements in place whereby payments to the state to a person making a claim for insurance, must get a letter from the relevant government department, confirming what was paid, and that could be done in instances such as the wage subsidy scheme or rates rebates.

"We haven't been in a Covid situation before, so I can't judge outcome of a court case. As soon as that happens, we will study it very carefully, but I would expect the insurance companies to apply the same principle here."

Source: Irish examiner