Special Insurance Update – 6 May 2020

Earlier this year Early Childhood Ireland joined the Alliance for Insurance Reform to address key insurance issues in the childcare sector. Some of the issues of concern to us include:

• Insurance Reform
  Highlighting the negative impact of persistently high premiums and calling for real reforms that will quickly reduce liability

• The lack of Insurers in our Sector
  Working to see how new insurers can be attracted to the sector so that there is choice for operators when it comes to securing quotes and policies on annual basis. While this is difficult in the current climate, we will be addressing this issue with the relevant department in the coming months.

However, we cannot ignore the insurance-related impacts of the COVID-19 crisis and the following is an update of what we are doing in this area as well as an update on our ongoing insurance reform campaign.

COVID-19 Related Issues

 The Alliance for Insurance Reform on our and our members behalf has had ongoing engagement with the Minister for Finance and his Department, the Central Bank and the Financial Ombudsman. Three key insurance related issues have emerged as this Covid-19 crisis has developed:

Business Interruption Cover:
We have submitted the Group Scheme Policy Document and schedule for review by a claim assessor to see if cover during a Pandemic is available. It would appear from the outset that the wording on the documents is very clear and we will keep you updated on any progress in this regard. If your insurance policy with another insurer you should seek advice from a claims assessor regarding your policy or from another suitably qualified person. 

Forbearance:
Many insurers have agreed with the Department of Finance to reduce premiums for business customers to reflect reduced levels of exposure as a result of COVID-19 restrictions for Employer Liability/ Public Liability and Commercial Motor. This agreement applies to customers of Allianz, AIG, AXA, FBD, RSA, Liberty Insurance, Travelers Insurance and Zurich, but not to Aviva or many underwriters insuring from abroad. We have requested Allianz to come back to us with the appropriate level of forbearance and we will keep you updated on this. We have clearly communicated to both the broker Arachas and Allianz that a tokenistic premium rebate will not be acceptable

Suspension:
Many insurers have agreed with the Department of Finance to maintain cover for unoccupied commercial buildings/ premises not in use due to COVID-19 restriction (for a maximum of 90 days). Appropriate supervision and security of the premises is required.

Again, this agreement applies to customers of Allianz, AIG, AXA, FBD, RSA, Liberty Insurance, Travelers Insurance and Zurich, but not to Aviva or many underwriters insuring from abroad. We have requested that Arachas communicate with all policyholders about this in the coming week.    

As not all members are covered by the same insurance company please confirm with your insurer that you have extended cover.

Insurance Reform

An outline Government Framework Document was published by Fianna Fáil and Fine Gael on April 14. While light on detail, it did say that the incoming Government will: “Tackle issues that will potentially undermine our recovery, such as the cost of insurance”.

Specific, detailed actions need to be set down in the Programme for Government (PFG) as it evolves from discussions between FF, FG, the smaller political parties and independents over the next few weeks, including but not limted to:

• A cut in unfair general damages to reflect international norms and ensure that legitimate minor injuries attract modest damages.
• Urgently review and re-balance the “common duty of care” so that occupiers are required to take a duty of care that is reasonable, practical and proportionate but not absolute, ignoring personal responsibility.
• Establishment of a Cabinet Committee to coordinate action and ensure the necessary reforms are put in place urgently.

Consumer Insurance Contracts Act 2019

This Act was signed into law just after Christmas but has still not been commenced by the Minister for Justice.

It is a wide-ranging Bill based on the 2015 Law Reform Commission report; sponsored by Pearse Doherty (SF) and supported by Michael McGrath of FF and Min. Michael D’Arcy.

When commenced, it will adjust the balance of power between insurers and policyholders. It will apply to ‘natural persons’ as well as ’incorporated bodies’, ‘sole traders, partnerships, trust clubs or charities with an annual turnover in its previous financial year of €3 million or less’.

The Alliance for Insurance reform has engaged actively on this legislation which, when introduced is not expected to bring down the cost of insurance in the short term but will make purchasing and using insurance products and dealing with insurers easier going forward.

We will continue to keep you updated on progress on all fronts over the coming weeks and months.