COVID-19 PQ Responses 11th May 2020 Prepared by Corporate Affairs, Department of Finance www.gov.ie/finance Topic – Insurance FIN/COVID/5.064/20 by Brendan Griffin T.D. To ask the Minister for Finance is it correct that Insurance Companies won’t cover Building Contractors to carry out essential repairs on a houses (Roof is in poor condition and not weather tight) during the Covid 19 restrictions even though the owner notified Garda Siochana who gave permission to the Contractor to travel and if he will make a statement on the matter. At the outset, it should be noted that as Minister for Finance, I do not have any knowledge of such matters as these form part of the terms and conditions of a particular insurance policy. In addition, I do not have any role in adjudicating on such matters. Having said that, my officials made contact with Insurance Ireland on the Deputy’s question. However, Insurance Ireland were unable to provide a view on this without further information on the case in question. Insurance Ireland recommended that the contractor in this case make contact with them directly through their Insurance Information Service. This can be accessed at: [email protected]. This Service provides assistance to those who have queries, complaints or difficulties in relation to their insurance. In relation to the more general issue of what type of work is considered to be essential, while it is not something that I have responsibility for, I would draw the Deputy’s attention to the list of essential service providers under current COVID-19 public health guidelines as published by the Government on 28 March. The guidelines can be found here: https://www.gov.ie/en/publication/dfeb8f-list-of-essential-service-providers-under-new-public- health-guidelin/. While I would not propose to comment on whether the work in the query submitted is considered to be emergency work, I would note that the Guidelines provide that “the delivery of emergency services to businesses and homes on an emergency call-out basis in areas such as electrical, plumbing, glazing and roofing” is an essential service. The Deputy should note also that, under current plans for Phase 1 of the Government’s Roadmap for Reopening Society and Business, from 18 May, construction workers will be allowed to return to work with social distancing measures applied. More information can be found here: https://www.gov.ie/en/publication/ad5dd0-easing-the-covid-19-restrictions-on-may-18-phase-1/ I believe that this may also be a relevant factor in this case. Finally, I would add that if the concerned party in this question is dissatisfied with the service received from an insurance provider, they may make a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at [email protected] or by telephone at 01-567- 7000. Topic – Money Lenders FIN/COVID/5.189/20 by Jennifer Whitmore T.D. To ask the Minister for Finance what measures are being put in place to advise people of the risks of money lending from private companies during COVI19? If there are plans to include alternative loan information on all material published and a ‘high risk loan’ warning on all advertising on moneylending? First of all, I would expect that all moneylenders would behave responsibly and respect the public health measures, including the social distancing measures, which have been put in place by the Government. Moneylenders should seek to implement alternative repayment methods, if possible, during this time. The Central Bank of Ireland (Central Bank) is responsible for the licensing and supervision of licensed moneylenders under the provisions of the Consumer Credit Act, 1995 (CCA). I am advised by the 1 Central Bank that that there is a strong framework of protection in place for consumers who choose to avail of the services of licensed moneylenders. In addition, the provisions of the European Communities (Consumer Credit Agreements) Regulations, 2010 (the CCR) set out certain additional requirements in relation to advertising and the content of relevant documentation (contractual and pre-contractual) to accompany certain credit agreements including moneylending agreements. The Central Bank’s Consumer Protection Code for Licensed Moneylenders (ML Code) also applies to licensed moneylenders while engaging in the business of moneylending. The relevant statutory and regulatory provisions in relation to advertising by licensed moneylenders are set out in the CCR and the ML Code. Regulation 7 of the CCR sets out that where an advertisement contains a reference to an interest rate or any figure relating to the cost of credit to the consumer that other standard information shall be included in a clear, concise and prominent way by means of a representative example. As set out in the ML Code, licensed moneylenders are required to act honestly, fairly and professionally in the best interests of the consumer and the integrity of the market. The ML Code also requires all advertisements to be fair and not misleading. At all times advertising must be in the best interests of consumers and compliant with Codes and Regulations. There is a strong framework of protection in place for consumers who choose to avail of the services of licensed moneylenders. In addition to the protections provided under the Central Bank’s ML Code, there are also important protections provided for in the relevant legislation whereby licensed moneylenders are prohibited from applying additional charges (other than a collection charge) to a moneylending agreement and are also prohibited from applying any additional charges in the event of a default in the payments due under the agreement (i.e., the total amount repayable by a consumer is limited to the amount specified in the moneylending agreement (the only exception being the awarding of legal costs by a Court of law)). Licensed moneylenders are also required to undertake a creditworthiness assessment before entering into a moneylending agreement with a consumer. The Central Bank has previously highlighted its expectation to all credit providers, including licensed moneylenders, that they lend responsibly and act in the best interests of consumers. Given the potentially increased vulnerability of the consumer base who typically engage with licensed moneylenders and the high cost nature of moneylending loans, the Central Bank expects licensed moneylenders to conduct their regulatory activities in a manner which reflects a culture of responsibility at all times. The Central Bank actively communicates to moneylenders in this regard. Licensed moneylenders need to be sensitive to changes in consumers’ circumstances due to the public health measures taken to counter the spread of the COVID-19 virus, which have left many in a financially vulnerable situation. The Central Bank expects licensed moneylenders to take account of the difficult and challenging situation in which many consumers find themselves and to take a consumer-focused approach in providing reasonable arrangements and/or assistance to support consumers affected by the COVID-19 situation at this difficult time. Licensed moneylenders who continue to issue loans to consumers must ensure they carry out adequate affordability assessments, particularly taking into account any financial difficulties faced by consumers as a result of COVID-19. The Central Bank is continuing to work towards the publication of the revised ML Code in the form of Statutory Regulations, which it expects to issue shortly. People experiencing financial difficulties should explore all the options available to them before applying for a loan. The Money Advice and Budgeting Service (MABS) is available to anyone experiencing problems with budgeting and debt. Furthermore, Government has introduced a range of supports to help people where their employment or salary has been impacted by COVID-19, including the Pandemic Unemployment Payment and the Temporary COVID-19 Wage Subsidy Scheme. These measures should also assist those in difficulty and hopefully negate the need to borrow, particularly at high interest rates. Finally, the issue of moneylender interest rates is currently being examined by the Department of Finance. The Department undertook a public consultation in 2019 seeking views on capping the 2 cost of licensed moneylenders and other regulatory matters in relation to moneylending. Analysis of the submissions received during the consultation is being used in the framing of policy proposals by my Department. Topic – Insurance FIN/COVID/5.447/20 by Brendan Smith T.D. To ask the Minister for Finance the outcome of discussions, if any, he had with insurance companies in relation to business interruption cover in view of the widespread concerns from businesses in different sectors and if he will make a statement on the matter. I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and also with regard to whether forbearance and other flexible measures are being offered to them. The Deputy should note that I and my officials have been engaging with the sector in an effort to get some much needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on the 27th of March and indicated amongst other things the following: (i) insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage. (ii) that where a claim can be made because a business has closed, as a result of a Government direction due to contagious or infectious disease, that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.