The CII takes a look at what's new on the policy and public affairs front this month
We are now more than three months into lockdown in the UK and as measures are eased and the economy is hopefully restarting, it is important to note some of the more recent regulatory guidance the Financial Conduct Authority (FCA) has laid out that applies to insurance professionals across the sector.
FCA TEST CASE OF THE VALIDITY OF BUSINESS INTERRUPTION CLAIMS
In June, the FCA published a short consultation on draft guidance to set out expectations of all firms handling business interruption (BI) claims and any related complaints until the court decision. The guidance served to highlight actions the FCA believe firms should take, including: identify the potential implications of the test case on their decisions to reject claims; keep policyholders informed about the test case and its implications for policies, claims and any settlement offers; and treat policyholders fairly.
On 10 June, the FCA began proceedings in the High Court on its BI insurance test case.
On publication of court documents and an update on the test case, the FCA's interim CEO, Chris Woolard, stated: "The court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes -- policyholder and insurer alike. We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market.
"The identification of a representative sample of policies and the agreement of insurers that underwrite them to participate in these proceedings is a major step forward in progressing the matter to court."
For more information, visit: bit.ly/2YPrU6v
FCA GUIDANCE ON ASSESSING PRODUCT VALUE
In June, the FCA confirmed its guidance for insurance firms on assessing product value during the coronavirus pandemic.
The guidance sets out what the FCA considers firms should be doing to identify any material issues that affect the value of the general insurance and protection products they offer, and their ability to deliver good customer outcomes during this time.
The FCA stated that firms should focus on reviewing products where benefits cannot be provided or where there has been a fundamental change in risk and products are now providing little or no utility to customers. Full guidance can be viewed at: bit.ly/2zyzrhb
ASSESSING ADEQUATE FINANCIAL RESOURCES
Finally, the FCA has published guidance on a framework for assessing adequate financial resources.
The guidance sets out the reasons for firms having adequate financial resources as well as expectations of the procedures firms should adopt.
The FCA wanted to make it clear that while it has clarified that its intention was not to impose additional requirements on firms, the current situation underlines the need for all firms to have adequate financial resources in place.
Full guidance on the new framework can be found at: bit.ly/3d4vP4m
Shayne Halfpenny-Ray is policy and public affairs adviser of the CII