With some business interruption insurance policies requiring claimants to prove the presence of a disease within a particular area before the policy responds, the Financial Conduct Authority (FCA) hopes to issue guidance to help simplify the undertaking for policyholders as well as offer clarity to insurance providers and intermediaries.
The goal, according to the FCA, is to ensure that the process of proving the presence of COVID-19 is made as simple as possible for eligible insureds. The regulator has released a draft to seek feedback on its proposed guidance until January 18, 2021.
In its draft guidance, which builds on the High Court’s judgement, the FCA explains the types of evidence and methodologies which policyholders can use when proving the presence of coronavirus as part of their claims. The document also outlines the watchdog’s views on how insurers should assess the evidence when handling claims fairly.
“This will help enable policyholders to receive claim payments as early as possible should the Supreme Court uphold the High Court’s decision that relevant policies potentially provide cover in response to the pandemic,” stated the FCA, which clarified that the High Court declarations covered by the draft guidance are not under appeal and not likely to be impacted by the Supreme Court’s upcoming ruling.
Additionally, the regulator said it would amend the draft guidance accordingly should it be affected by the appeals outcome. The Supreme Court is expected to release its verdict by January next year.
The FCA went on to say: “If we proceed to issue guidance following this consultation, we propose it would come into effect as soon as it is issued and cease to have effect on December 31, 2021 – we expect that all claims to which the guidance could be relevant would have been resolved by that date.”
