Coronavirus: Insurance firms ordered to pay out or explain
The Financial Conduct Authority has ordered insurance companies to pay out claims to firms “as soon as possible” or explain themselves to the watchdog.
The FCA has told insurers if there are reasonable grounds to pay part of a claim but not the full claim, they must make an interim payment.
If not, insurers must tell the FCA how they reached the decision and how it is “a fair outcome for customers”.
The move is aimed at relieving pressure on firms during the Covid-19 lockdown.
“A key objective of the FCA is to ensure that financial pressures on policyholders are not exacerbated by slow payment, rather, such claims should be paid as soon as is possible,” the FCA’s interim chief executive, Christopher Woolard, told insurers in a letter.
“This is consistent with the wider objective of the authorities to support business and consumers during the current crisis.”