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FCA invites market participation to help resolve COVID-19 BI disputes

18th May 2020 - Author: Staff Writer

The UK’s Financial Conduct Authority has begun seeking input from insurers and brokers to help address and understand ongoing contractual issues surrounding coronavirus-related business interruption cover.

financial-conduct-authority-logoThe regulator said earlier this month that it was seeking a court declaration to help resolve the wide-ranging issue.

As was noted at the time, whether there is coverage depend on a number of factors including the policy’s wording, but the FCA noted that the range of wordings and types of coverage are broad enough that it could “create ongoing uncertainty for a lengthy period.”

The regulator therefore stated that it would bring relevant cases to court as soon as possible for an authoritative declaratory judgment regarding the meaning and effect of some BI insurance policy wordings where there remains unresolved uncertainty.

The FCA’s latest decision to begin reviewing extensive material provided by relevant industry sources is driven by a recognition that its consumer protection and market integrity objectives will be more effectively met by covering a broad cross section of policies and issues.

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At this stage, the FCA is inviting policyholders and insurance intermediaries aware of unresolved disputes with insurers over BI policy terms to engage if they want them to take concerns into account as part of the test case.

In particular, the FCA is hoping to receive arguments on why cover should be available, together with details of policies that could be shown to have not responded appropriately to a claim.

The regulatory body underlines that information received will be confidential and covered by its litigation privilege.

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