Government urged to request Central Bank intervention in insurance row

The Central Bank is an independent regulator and cannot intervene,  Tánaiste Leo Varadkar told the Dáil

Tánaiste Leo Varadkar told the Dáil the Government has no power to direct the Central Bank to intervene in the business interruption insurance issue. File picture: Maxwells

The Government cannot ask the Central Bank to examine business interruption insurance, Tánaiste Leo Varadkar has said.

Sinn Féin's Pearse Doherty called on the Government to call on the Central Bank to launch a "tracker-mortgage"-type investigation into business interruption insurance after the High Court ruled last week in favour of four publicans that they were due a pay-out from their insurer FBD.

"These businesses had nowhere left to turn, so they decided to fight their own corner in the courts. The case revolved around the issue of business interruption insurance on whether they were covered as a result of the Government's closure and response to the Covid-19 outbreak," Mr Doherty said.

"The decision is legally binding now on eight insurers in Britain as a result, and thousands of businesses will receive payouts – a financial lifeline for so many of them that are struggling at this time.

I previously called on the Central Bank to intervene in a similar manner. The Central Bank took no action and your Government took no action at that time and that is why the four pubs were forced to defend themselves in the courts."

The judgment could affect up to 1,300 businesses which hold similar policies with FBD, however, Mr Doherty said there were thousands of businesses which have similar but not identical policies with other insurers who are "dragging their heels and refusing to pay even interim payments to businesses".

'Wave of litigation'

"Either the Central Bank intervene or there is going to be a wave of litigation at a cost that is too much for many small businesses," he added 

Mr Varadkar said the High Court ruling last week "is very significant", but the Government cannot intervene.

"The Central Bank is an independent regulator. It operates independently of Government. It does not take direction from Government," he said.

"You've called on Government to intervene, you say those things because you hope other people are stupid and you believe that they may think that the Government has this power of intervention. It doesn't.

"It's an independent regulator, it has to decide for itself whether it's going to intervene or get involved in this particular matter. 

"I know the Central Bank is aware of this issue. I know they're examining it, but they will make a determination as an independent Central Bank, and they're not subject to any direction from Government, and any calls that you make to Government to somehow intervene or direct the Central Bank to do something is totally disingenuous, and it's an attempt by you to mislead people in small business to pretend that you're on their side."

Mr Doherty said Mr Varadkar was "wriggling out of the situation".

"The reality is you led the Government last year, you washed your hands of it. You did nothing, absolutely nothing," he said.

"That is why we in this House need to make a united call for the Central Bank now to intervene."