Banks and insurers reminded of their requirements to customers amid cost-of-living crisis

The regulator wrote to firms to urge them to manage potential risks for consumers arising from energy-driven inflation, rising interest rates and significantly higher consumer prices and business costs. Picture: Jason Alden/Bloomberg

The Central Bank has reminded insurers and banks of their requirements to customers amid the cost-of-living crisis.

The regulator wrote to firms to urge them to manage potential risks for consumers arising from energy-driven inflation, rising interest rates, and significantly higher consumer prices and business costs.

“The letter we are publishing today highlights a number of areas to which firms should pay particular attention as they do so, in order to ensure that consumers’ best interests are protected at this time and recognising the multiple challenges consumers are facing,” said director of consumer protection with the Central Bank, Colm Kincaid.

In the letter, the regulator said firms need to identify and address risks to consumers that may potentially emerge from economic changes within which the firm is operating.

In addition, the Central Bank said all firms regulated by the Central Bank are required to have sufficient operational resilience to manage change without creating risks to consumers.

It also reminded firms to ensure credit is affordable when providing it and to consider both the short and long-term needs of the consumer when giving advice on savings and investments.

The Central Bank also told insurance companies and banks to take into account how a customer’s circumstances could be impacted by the current economic outlook.

In particular, firms should be able to identify consumers in vulnerable circumstances, including financial difficulty, and provide them with appropriate supports,” the Central Bank said.

Sales and advice on insurance products should consider the impact of increasing costs on consumers’ budgets, both to meet premium payments and in the event of the occurrence of an insurable event, the regulator said. 

"Consumers should be supported to understand the implications of any reduction in cover," said the Central Bank.