On 24 July, the Financial Conduct Authority (“FCA“) announced its proposal to extend a series of temporary measures to help customers who hold insurance and premium finance products and who may be in temporary financial difficulties due to Covid-19. FCA is proposing to extend its updated guidance until 31 October 2020.
The FCA says firms should continue to consider the options they can offer customers. It says where payment deferral is not in a customer’s best interest, the measures that could be taken include premium reductions due to changes in risk profile or offering an alternative product which better meets the customer’s needs, as well as waiving fees associated with altering cover.
The FCA says that where amendments to the insurance cover do not help alleviate the customer’s temporary payment difficulties, firms will be expected to grant a payment deferral of between 1 and 3 months, unless it is obviously not in the customer’s interest to do so.
The regulator is also clear that customers who are struggling to afford their insurance or premium finance payments because of the impact of Covid-19 should contact their insurer or insurance broker to discuss their options.
If confirmed, the updated guidance will come into force by 18 August 2020.