FCA seeks legal clarity about BI claims arising from Coronavirus
The Financial Conduct Authority (FCA) is to seek a court declaration to bring an end to uncertainty for many customers making business interruption (BI) claims arising from the Coronavirus (Covid-19) pandemic, and the basis on which firms are making decisions to accept claims.
The FCA said in a statement that it will be bringing to court as soon as possible what it believes are the key relevant cases which provide the greatest clarity on specific policy clauses to get an independent view on these disputed BI insurance policies if there remains unresolved uncertainty. The cases selected will be chosen as a representative sample of the most frequently used policy wordings that are giving rise to uncertainty.
The FCA said it will seek to put cases before the Court on an agreed basis with the insurers concerned in order to get the fastest possible judgement. Individuals affected will still be able to access the Financial Ombudsman Service (FOS) or the courts if they are eligible and wish to do so.
The FCA will be writing to a small number of insurance firms seeking clarification about whether they are declining or intend to decline BI claims. These firms will have until 15 May 2020 to clarify their position with the FCA. The regulator will then decide which firms it will ask to join the court process based on the information submitted.
BIBA welcomed the move: ‘Our members have serious concerns for their clients and their ability to recover from this situation and we have been working to help members resolve these issues. This intervention from the regulator to create certainty for many customers making BI claims, and the basis on which firms are making decisions on claims is a step in the right direction.’
BIBA members’ compliance and regulation queries should be directed to: [email protected].