THE interim chief executive of the Financial Conduct Authority (FCA) – the UK’s financial services regulator – has written to the country’s insurance companies to demand that claims related to the coronavirus pandemic “are assessed and settled quickly”.
While noting that most businesses’ insurance policies will not cover business interruption due to the pandemic, interim chief exec Christopher Woolard said that, where policies do include coverage for pandemics, “such claims should be paid as soon as possible”.
“A key objective of the FCA is to ensure that financial pressures on policyholders are not exacerbated by slow payment, rather, such claims should be paid as soon as possible,” wrote Woolard.
“This is consistent with the wider objective of the authorities to support business and consumers during the current crisis. If there are reasonable grounds to pay part of a claim but not to make the payment of such claims in full, we would like you and your board to adopt an approach of making an interim payment.
“Many firms are already doing this. If you disagree with doing so, we would like you to send to us the grounds for reaching that decision including how you believe it represents a fair outcome for customers.
“Your firm’s decision is likely to help inform our assessment of its culture.”
Woolard added that disputed claims involving businesses with a turnover below £6.5 million and fewer than 50 employees are likely to be referred to the Financial Ombudsman Service.
And the FCA has established its own small business unit to “co-ordinate the activities of the FCA across small business issues, in terms of ensuring regulated firms are supported through the challenges posed by the current crisis, gathering intelligence about the treatment of small businesses by financial services firms during the crisis and ensuring a co-ordinated response by the FCA to any issues identified”.
“We will also co-ordinate closely with the Financial Ombudsman Service,” wrote Woolard.