FCA warns insurers ‘settle claims or explain’

The Financial Conduct Authority has warned insurance company bosses to speed up and settle coronavirus-related claims or explain themselves to the regulator.

In a letter sent to companies yesterday (15 April), Christopher Woolard, interim chief executive of the FCA, said that “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 is possible.”

Although he recognised that most business interruption policies do not cover pandemics he said that when an insurer clearly had an obligation to pay “it is important that claims are assessed and settled quickly.”

He instructed insurers disputing or delaying interim payments to small businesses where there were grounds to pay 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,” he said.

In response to the coronavirus economic climate, the FCA has said it will launch a SME unit to coordinate its actions and look into the treatment of small businesses by financial services firms.