Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps the Government is taking to ensure that insurers settle claims as swiftly as possible for businesses now assessed as qualifying for business interruption insurance coverage as a result of the outcome of the recent Financial Conduct Authority test case on that matter.

The Government is in continual dialogue with the insurance sector regarding its response to this unprecedented situation.

The Financial Conduct Authority rules require insurers to handle claims fairly and promptly and in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.

On 15 September, the High Court published its judgment on the FCA court case for a selected number of key issues, to resolve uncertainty for many customers making business interruption claims. The FCA has published guidance for firms in response to the High Court’s judgment setting out their expectation that firms should apply the judgment of the court in re-assessing all outstanding or rejected claims and complaints which may have been impacted by the test case, with the exception of cases that have been referred to the Financial Ombudsman Service.

On 2 November, the Supreme Court granted permission for the FCA and insurers to appeal if it is not possible to resolve the outstanding issues in the coming weeks. The hearing is scheduled to take place from 16 November. The FCA and insurers had agreed that they would seek to have any appeal heard on an expedited basis, given the importance of providing legal clarity to policyholders as soon as possible.

Where a claim has been assessed as qualifying for business interruption insurance cover, it is the Government’s expectation that insurers should work to issue payments promptly. The Government continues to monitor the situation closely.