The Government is in continual dialogue with the insurance sector about its contribution to handling this unprecedented situation. The Government is also working closely with the Financial Conduct Authority (FCA) to ensure that the rules are being upheld during this crisis.
The FCA’s rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim, and appropriate information on its progress; 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.
Furthermore, on 1 May, the FCA published guidance for firms, which sets out their expectations of firms when considering the fair treatment of existing customers, and in particular those customers experiencing or reasonably expecting to experience temporary financial difficulties due to circumstances arising from COVID-19.
The FCA is working closely with the Financial Ombudsman Service (FOS), an independent body set up to provide arbitration in cases where consumers feel they have been unfairly treated. The decision of the FOS is binding on insurers up to £350,000.
The Government recognises that consumers facing financial difficulty will require support from elsewhere. The Government has announced unprecedented support for businesses and workers to protect them against the current economic emergency including an initial £330 billion of guarantees equivalent to 15% of UK GDP.
We have made significant changes to the operation of statutory sick pay, universal credit, and employment and support allowance to ensure that people have quicker and more generous access to a support system, and we have taken further immediate steps to give businesses access to cash to pay their rent, salaries or suppliers.