Business: Insurance

Treasury written question – answered on 11th May 2020.

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Photo of James Davies James Davies Conservative, Vale of Clwyd

To ask the Chancellor of the Exchequer, what recent discussions he has had with financial regulators on ensuring that insurance providers are not unfairly dismissing claims made by businesses as a result of the covid-19 outbreak.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government is working closely with the Financial Conduct Authority (FCA) to ensure that the rules are being upheld during this crisis, and fully supports the FCA in its role as conduct regulator.

The FCA rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed. In addition, the FCA has said that, in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.

On 15 April, the FCA published a Dear CEO letter to the insurance industry on the subject of business interruption claims. This set out its expectations for the sector to be as flexible as possible, to ensure that payments for valid claims are made quickly to customers, including interim payments where required, and to clearly communicate to customers where exclusions apply. The letter can be found at the following link: www.fca.org.uk/publication/correspondence/dear-ceo-insuring-sme-business-interruption-coronavirus.pdf

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