Insurers warned: Pay up or face enforcement
This follows the unanimous dismissal of an appeal by some of the world’s largest commercial insurers by the Supreme Court – including Arch Insurance (UK) Ltd., Argenta Syndicate Management Ltd., Hiscox Insurance Company Ltd., MS Amlin Underwriting Ltd., QBE UK Limited and Royal & Sun Alliance Insurance Plc (RSA) – who argued that business interruption policies should not cover widespread disruptions caused by government efforts to contain the coronavirus.
The Supreme Court ruled in favor of policyholders, finding that the vast majority of policyholders with non-property damage business interruption coverage can make valid claims for their business interruption losses caused by the UK government’s national response to COVID-19.
Now the FCA is putting pressure on insurers to respond. According to a Reuters report, the FCA’s Executive Director for Consumers and Competition, Sheldon Mills, said in a letter to insurers’ executives on Friday, “If we see insurers failing the expectations set out here, we will be the full spectrum of use our regulatory tools and powers to ensure this. “
Mills also said the watchdog will regularly request data from insurers about their progress in processing COVID-related business interruption claims and how many have been resolved. He said the FCA intends to release some of this data in the future.
The Supreme Court ruling has hit large numbers of policyholders and insurers, and the status and value of many business interruption claims will have changed. According to Reuters, Mills wrote, “We expect you to be clear on these points and your next steps when writing to all of your policyholders with affected claims or complaints in the coming week.”