(Reuters) – Insurers face enforcement action if they do not pay out as soon as possible for commercial insurance claims following a landmark court decision, the UK Financial Conduct Authority said on Friday.
The Supreme Court ruled earlier this month that many business insurances should cover losses caused by coronavirus lock-ins, and the FCA said insurers should now pay up as soon as possible for valid claims. use the full range of our regulatory tools and powers to ensure they do so, ”said FCA's Consumer and Competition CEO Sheldon Mills in a letter to insurance companies' CEOs. in June last year, saying it could affect 370,000 policyholders and 60 insurers, paving the way for an estimated £ 1
Six of the world's largest commercial insurance companies – Hiscox, RSA, QBE, Argenta, Arch and MS Amlin – claimed that many business interruption policies did not cover major disruptions following the government's efforts to curb the virus from March last year.
However, the UK Supreme Court unanimously rejected appeals from insurers. in a comprehensive victory for the regulator and policyholders.
Mr. Mills said the FCA will regularly request information from insurers about their progress in handling claims and how many have been settled.
"Our intent is to publish some of this information," Mills said.
Court Assessments in the test case give insurers the clarity they need to now end their claims proceedings with the vast majority of their business insurance customers, Mills says.
Some previously rejected claims and complaints are now valid or the values of claims have changed, he said.
"We expect you to be clear on these points and in your next steps when writing to all your policyholders with relevant claims or complaints in the coming week."
More insurance and news on risk management about the coronavirus crisis here .