Central Bank ‘concerned’ over handling of flood claims
Report raises questions about transparency and oversight of third-party firms
The Central Bank said it was concerned by the findings of a report on insurance claims for flood damage.
A Central Bank report has raised concerns about the handling of insurance claims relating to water damage following an inspection to examine compliance with the Consumer Protection Code.
The inspection, which reviewed 188 claims at 10 of Ireland’s largest insurance firms, found a lack of controls when third party firms were used to handle claims, a lack of transparency on claims retention policy and instances where documentation contained terms and conditions that may be unfair or unclear to consumers.
Director of Consumer Protection Bernard Sheridan said the bank was concerned by the findings of the inspection.
“The Central Bank expects all regulated insurers to work in the consumer’s best interest by selling suitable insurance policies, providing clear information and handling claims properly when they arise, directly or through a third party such as a loss adjuster,” he said. “Consumers can often feel vulnerable when they experience damage to their home. It’s important that firms deal with their claims in a prompt and fair way.
There were “isolated” incidences of potentially unfair settlements, the Central Bank said.
A letter is being issued to the industry today to emphasise the requirement to be in full compliance with the code when handling claims, and the Central Bank is to address the specific issues identified.
The Central Bank decided to carry out the inspection following the increased frequency of floods in recent years, it said.
However, industry body Insurance Ireland hit back at the report, claiming it wasn’t representative of the industry as a whole.
“The findings issued today by the Central Bank do not present a true picture in relation to household property claims, the vast majority of which are handled very satisfactorily,” said Insurance Ireland chief executive Kevin Thompson.
He said some of the language used by the Central Bank was ambiguous, and claimed it was confusing for both the industry and customers.
“We also note the small size of the sample, and the acknowledgement in the accompanying notes that issues such as the reference to potentially unfair settlements only related to a very small number of the already small sample size,” he said.