Brought to you by:
IUA
IUA

FCA warns insurers on virus-led policy changes

Facebook Twitter LinkedIn Google

UK insurers seeking to suspend or change policies to limit their coronavirus exposure have been warned by the country’s regulator against acting unfairly toward consumers.

“We understand that firms may decide to, or want to, suspend some product offerings,” the Financial Conduct Authority (FCA) says.

“While we appreciate that firms are trying to manage their exposure to risks, we want to make clear our expectations of how firms deliver this change.”

The FCA says in some cases it may be unfair not to renew policies, even if a product would otherwise be suspended, particularly if continuity of cover is an issue. Insurers should also make sure alternative products meet the needs of customers and are in their best interests.

Firms changing policies to exclude coronavirus must communicate that clearly before renewal, the FCA says.

“We expect firms to consider the needs and particular circumstances of individual consumers, taking into account any vulnerabilities, when considering what may be an appropriate change to make.

“Firms must be able to demonstrate that they are complying with our rules and treating their customers fairly.”

The FCA says the claims process should take into account that changing consumer behaviours could include the need to work from home or commute by car.

“We expect motor and home insurers not to reject claims because of a consumer’s understandable temporary change in how they use their vehicle and their home address, in response to Government advice and the emerging coronavirus situation.”

The regulator has told insurers that they should have a senior manager responsible for business continuity and for managing the impact of coronavirus.

“Firms must identify how staff absence or inability to use business premises can be sufficiently mitigated to ensure critical services are provided to customers,” it says.