The Financial Conduct Authority (FCA) has said it expects health insurance firms to make a specific effort to make clear any time period restrictions that might when consumers take out a new policy.
The regulator said that insurers should, for example, make it clear to consumers if example if a policy will not pay out from 12 or 18 months of taking it out.
The FCA made the comments as it laid out its plans and expectations of how the insurance industry should operate during the ongoing coronavirus outbreak.
“We expect firms to make clear any time period restrictions when consumers take out a new policy, for example if a policy will not pay out from 12 or 18 months of taking it out”
FCA position statement, 17th March 2020
In a statement released today, the regulator said it welcomed moves by travel insurers to make consumers aware of the scope of their cover and what exemptions there may be.
The FCA said: “Consumers should also be able to find this information on firms’ websites in a clear, concise way and have access to call centres. We have provided guidance to consumers on our website.”
The regulator also said that it has been “encouraged” by the actions of some lenders in granting flexibility on mortgage payments as a way of protecting consumers.
It said: “We will be discussing with the industry and updating approaches mortgage providers may take to assisting their customers in the coming days.”
The FCA has “significant resources” allocated in response to the crisis, including a number of dedicated teams overseen by its executive committee.
But it stressed that it also expects firms themselves to provide “strong support and service” to customers during this period.
It said: “They should be clear and transparent and provide support as consumers and small businesses face challenges at this time. We also expect firms to manage their financial resilience and actively manage their liquidity. Firms should report to us immediately if they believe they will be in difficulty.”
Firms that are moving to alternative sites and introducing more working from home arrangements should consider the broader “control environment” in these new circumstances, the FCA said.
They should continue to record calls, but the regulator acknowledged that some scenarios may emerge where this is not possible.
It said: “Firms should make us aware if they are unable to meet these requirements. We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved.
“Firms may experience difficulties in submitting their regulatory data, in which case we expect them to maintain appropriate records during this period and submit the data as soon as possible. Firms should not unnecessarily delay these submissions. If firms have concerns, they should contact us as soon as possible.”
The regulator said it is reviewing its work plans so that it can delay or postpone activity which is not deemed critical in the short-term.
As a result, it is extending the closing date for responses to its open consultation papers and calls for input until 1 October 2020 and rescheduling most other planned work.
It said: “We have also scaled back our programme of routine business interactions, especially through meetings so that we only contact firms on business-critical requests and responses to the current situation.”
The statement, including the list of delayed consultation papers and calls for input, is available here.