The Financial Conduct Authority have issued guidance on temporary steps designed to assist holders of insurance policies, following concerns that providers were not doing enough to help customers under financial strain due to COVID-19. From today, all insurers, finance lenders, finance brokers and debt collectors will be expected to allow policyholders to defer payments while keeping coverage in place. The measures will be in place for three months initially, after which they will be reviewed if appropriate.

The FCA expects firms to grant payment deferral “unless it is obviously not in the customers interests” to do so, and providers will be expected to consider other options such as re-assessing a customer’s risk profile, which may have altered due to the coronavirus pandemic, resulting in scope for lower premiums. The FCA have also stated that cancellation and other fees associated with adjusting policies should be waived.

This follows a report issued earlier this month by Consumer Intelligence which found that the number of consumers who identify as “vulnerable” has doubled from this time last year, now reaching 13 million. The FCA define a “vulnerable” consumer as someone who due to their circumstances is “susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.

The new rules apply only to consumers, however the FCA are still seeking legal clarity on the wording of business interruption insurance policies to determine whether they should be providing cover in cases where claims have been rejected.

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