The Financial Conduct Authority (FCA) is to seek legal clarity on business interruption (BI) insurance in an effort to resolve doubt for businesses who are facing uncertainty on their claims.
The regulator’s move, has been welcomed by the Chartered Insurance Institute (CII), which said the decision is “preferable to a disorderly and potentially lengthy” series of test cases that are less likely to reach a comprehensive and definitive solution.
Matt Connell, director of policy and public affairs for the CII, said: “The process which the FCA will use to select test cases will be very important, and we anticipate that the FCA will consult widely with both consumer groups and the insurance sector to maximise the chances of reaching a decision that is fair, comprehensive and definitive.”
A spokesman for the British Insurance Brokers Association (BIBA), said the trade body also welcomed the news, stating that its members have “serious concerns” for their clients and their ability to recover.
The spokesman said: “This intervention from the regulator to create certainty for many customers making BI claims, and the basis on which firms are making decisions on claims is a step in the right direction.”
The FCA has indicated that customers may still access the Financial Ombudsman or the courts if they qualify and wish to do so.
The BIBA spokesman added: “It is our view that this action by the FCA will help to resolve issues for businesses and we urge the market to engage with this resolution activity.”
The FCA’s statement can be read here .