The Central Bank is to write to the insurance industry setting out how it expects insurance firms to handle the settlement of claims arising from the Covid-19 pandemic.
The regulator says firms must ensure that all claims are appropriately assessed and where there is insurance cover in place, that claims are accepted and paid.
The Central Bank's intervention follows complaints from some business owners impacted by the coronavirus crisis that some insurers are refusing to pay out on policies that include business interruption cover.
Peter Boland, director of the Alliance for Insurance Reform, said that it had been inundated with calls from small businesses that have had to close, thought they were covered by their business interruption insurance and are now being told by their insurer that they are not.
He has written to the Minister for Finance, Central Bank and Financial Services and Pensions Ombudsman seeking an intervention.
In a statement, the Central Bank said it continues to engage proactively with insurers on contingency and claims related issues arising from the impact of Covid-19 on consumers, households and businesses.
It also said it expects insurance firms will continue to protect customers and comply with all regulatory requirements in light of the significant economic disruption.
Firms must ensure, it said, that all claims are appropriately assessed and where there is insurance cover in place that claims are accepted and paid.
Sources said the bank will tell the industry in the coming days that it expects insurers to offer a claims settlement process which is fair, takes account of all relevant factors and represents the best estimate of a customer's reasonable entitlement under a policy.
It is understood the bank's view is policies should be clear about what is covered and what it not.
The bank is also understood to be engaging at a European level on the matter.
Earlier this week the Department of Finance said that in relation to business interruption insurance, whether a business can make a claim in relation to loss of earnings because of closure due to Covid-19 will depend on the specifics of their policy.
However, the Minister, as a general rule, believes that insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage, it said.
Mr Donohoe believes that where businesses have had to close on the basis of advice or a direction to close by the Government, and their insurance policy covers such a scenario, that insurers should engage with those businesses honestly, fairly and professionally to honour those elements of the policies covered, the department said.
It also said that where a policy states that a claim can be made when a business has closed as a result of a Government direction, because of a general notifiable infectious disease, the Minister believes that Government advice to close a business amounts to the same thing.
"He believes that insurers should not try to distinguish between these situations, where there is a general infectious disease provision in a policy, in order to avoid payment of claims," a spokesman said.
"In this regard, he believes the Government's direction to childcare providers and its advice to pubs and clubs to close is sufficient for those businesses to be able to make a claim on their insurance where the appropriate business interruption cover is in place."