“Business interruption risks becoming the tracker mortgage scandal of the insurance industry.”
That was the assertion made by Dáil Éireann member Pearse Doherty in yesterday’s (February 11) debate at the lower house of the Oireachtas. The Irish TD was lamenting how the Central Bank of Ireland has not intervened in the same way that the Financial Conduct Authority in the UK has, on behalf of impacted policyholders.
“There are two options,” stated Doherty, who believes the ‘inaction’ was what forced four publicans to take the court route against FBD Insurance. “Either the Central Bank intervenes, as I have been calling for since as far back as last March, or there will be a wave of litigation at a cost that is too high for many small businesses.”
According to the debate transcript seen by Insurance Business, Doherty wants the Central Bank to not only undertake an audit of all business interruption insurance policies but also implement an intrusive supervision of claims handling – which, in his view, are within the regulator’s powers.
Additionally, Doherty has called on the government for backing.
In response, Tánaiste Leo Varadkar declared: “On the role of the Central Bank, the deputy knows that it is an independent regulator. It operates independent of government and it does not take direction from government. Over the course of the past few months and even in the past year, the deputy has called on the government to intervene to direct the Central Bank to do something.
“The deputy does not say those things because he is stupid; he is not a stupid man. He says those things because he hopes other people are stupid and he believes that they may think that the government has this power of intervention; it does not.”
Varadkar – the minister for enterprise, trade, and employment – stressed the Central Bank’s independence, saying the watchdog “has to decide for itself” whether it is going to intervene or get involved in the matter.
Calling Varadkar’s reply “shocking,” Doherty said the Tánaiste should not try to “wriggle out” of the situation. “The reality is he led the government last year,” said the TD. “I put this case to him and he washed his hands of it. He did nothing.”
Doherty went on to urge the entire Dáil Éireann to make a “united call for the Central Bank to intervene now, as has happened across the water.” He noted that the move will ensure that the regulator’s consumer protection role is enacted.
Meanwhile, referring to the case law resulting from FBD’s court loss, Varadkar said we will see in the next few weeks what the quantum is and what the implications are for other businesses.
