Proposals to support insurance customers who are in financial difficulty after October due to coronavirus have been outlined by the City regulator.
The Financial Conduct Authority (FCA) said its new draft guidance aims to prompt firms to help customers, where possible, to reduce the impact of financial distress and ensure they continue to have insurance that meets their needs.
Some customers may need temporary support while others may need help longer-term, the FCA said.
It is asking for feedback to be submitted by 5pm on Tuesday October 20 on what arrangements should be in place after October 31.
Temporary measures to help customers have been in place since May.
— Financial Conduct Authority (@TheFCA) October 16, 2020
The new proposals will mean consumers who have already had a payment deferral as well as those newly in financial difficulty will still receive support tailored to their needs.
This would include reassessing the risk profile of the customer to see whether they could be offered lower monthly payments, considering whether other products may suit them better, and help to avoid cancelling cover which the customer needs.
Some customers could be allowed more time to repay debts and some charges could be reduced or waived.
The FCA said the new guidance differs from measures previously put in place.
For example, firms will not be expected to proactively contact all consumers who miss payments. They should still consider whether it may be appropriate to contact them to offer support and consider customers’ vulnerabilities.
Firms should make the different options available to consumers clear in their communications, including on their websites and apps, and encourage them to make contact if they are experiencing financial difficulties, the FCA said.