(Reuters) – Ireland's central bank governor told insurers to immediately honor and pay valid claims related to COVID-19 disruptions, following a successful test case in court last week, or risk legal action by the regulator.
The Supreme Court of Ireland ruled on 5 February that four public insurers insured by the FBD were entitled to be compensated for losses under lockdown-linked claims in a case that could have implications for over 1000 similar contracts for the FBD alone.
Gabriel Makhlouf said that a number of insurers had already accepted and started resolving claims for business interruptions.
He said that the central bank had been clear that where a relevant court outcome has a beneficial effect on similar customers, insurers should ensure that customers benefit and, where there is doubt, interpret to policyholders.
"In short, insurers must adopt a customer-first approach to resolving these issues and if they do not, the central bank has taken a nd will take appropriate action and use all our legal powers when appropriate," he said. Makhlouf in a speech.
"Let me make it clear to the insurers involved: we have been clear with you. The British courts have been clear with you. And now the Irish courts have been clear with you. Any continued failure to do the right thing by your customers is unforgivable, and we will not hesitate to take action accordingly.
The government has welcomed the court decision, but the main opposition party, Sinn Fein, reiterated its call on the regulator to launch a system-wide investigation similar to the years-long probe of bank overcharges for certain mortgage customers.
"I urge the central bank to intervene on behalf of policyholders as they have the mandate to protect and investigate business interruption insurance outages," said Sinn Fein finance spokesman Pearse Doherty in a statement.