Insurers have provided written answers on coronavirus exclusions for travel and business cover ahead of two days of Federal Parliament committee hearings that start tomorrow.

Tim Wilson, the Chairman of the House of Representatives Standing Committee on Economics, has asked for preliminary responses on the impacts of travel advisories and various scenarios, while on the subject of small business he asks about notifiable diseases and operation of the Biosecurity Act 2015 and the Quarantine Act 1908.

The hearings are part of the committee’s “Review of the Four Major Banks and other Financial Institutions”, referred to it last year by Treasurer Josh Frydenberg.

The focus was expected to be on the Hayne royal commission outcomes, but consumer and small business concerns about coronavirus exclusions have since gained prominence.

The preliminary written responses by insurers highlight to the committee that general insurers don’t provide health cover in Australia related to travel, and outline timing impacts on policies.

“For each claim received, the facts of each case will be investigated and assessed against the relevant policy wording, and other factors such as when the policy was taken out and the developing circumstances surrounding COVID-19, to determine the final coverage position,” Chubb says.

Business policies are not designed to cover pandemics or epidemics that are beyond the scope of the industry, insurers say.

IAG says the exclusion for notifiable diseases was introduced in business interruption policy wordings following the Severe Acute Respiratory Syndrome outbreak in 2003.

“This change was driven globally by reinsurers as they held a view that a global pandemic outbreak in the future was unquantifiable from an aggregated loss perspective and had the potential to severely stress/collapse the global insurance/reinsurance industry,” it says.

Insurers also say the approach taken will be the same whether wordings cite the biosecurity or quarantine acts, with the intention and effect of both essentially the same.

QBE says Australian Prudential Regulation Authority pandemic stress-testing in 2006 showed that insurers most affected in terms of capital adequacy were those with large exposures to business interruption, consumer credit or travel insurance.

“As a result of this process, many insurers, including QBE, excluded cover for some products that were highly exposed to the risk of infectious diseases with pandemic potential,” it says.

The Insurance Council of Australia (ICA) will appear first tomorrow, followed by the Australian Financial Complaints Authority.

Allianz, Clearview, AIA and TAL Life will also appear on the first day, while Youi, Suncorp, IAG, and QBE are scheduled for Wednesday. Funeral insurer Youpla, the former Aboriginal Community Benefit Fund, is also listed for the second day.

Mr Wilson’s comment that insurers must be held to account “given the widespread misconduct in the insurance sector identified by the Hayne royal commission” has created concern in the industry that some of the parliamentary committee members may have preconceived impressions.

As insuranceNEWS.com.au reported on Friday, the accuracy of Mr Wilson’s statement has been challenged.

“Hayne did not find any systemic issues within general insurance,” one senior source said. “Widespread misconduct was not a finding attributed to general insurance.”

Another said he fears some MPs might “go looking for a headline” over pandemic exclusions in policies without a proper understanding of how insurance works.

insuranceNEWS.com.au will publish a live blog of the hearings, starting at 9am tomorrow.