Temporary help for insurance customers set to be extended under FCA proposals
Insurance customers who are in temporary financial difficulties due to coronavirus are set to receive further help under proposals from the City regulator.
The Financial Conduct Authority (FCA) plans to extend the temporary help already in place until the end of October, subject to a brief consultation so that it can act quickly.
It has already taken similar steps to extend the help available around several other financial products, such as mortgages.
The original measures related to insurance came into force on May 18, and the FCA said they would be reviewed after three months. Under its proposals on Friday, its guidance for firms would be extended until October 31 2020.
The regulator said insurance firms should continue to consider what options they can offer customers.
Where payment deferral is not in a customer’s best interests, measures that could be taken may include cutting premiums due to a change in the policyholder’s risk profile or offering an alternative product which would better suit the customer’s needs – and waiving any fees involved with changing the cover.
Where amendments to the insurance cover would not help alleviate a customer’s temporary payment difficulties, firms will be expected to grant a payment deferral of between one and three months, unless it is obviously not in the customer’s interest to do so.
The FCA emphasised that it is important that customers do not leave themselves uninsured, and that their insurance cover meets their demands and needs.
It said people struggling to afford their insurance or premium finance payments because of the impact of coronavirus should contact their insurer or insurance broker to discuss their options.
The FCA wants to hear feedback by 5pm on Tuesday July 28 on its proposal to extend its guidance until October 31.
Its draft guidance does not prevent firms from taking their own extra measures to support customers.