NFU Mutual: Coronavirus

(asked on 20th November 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent discussions he has had with NFU Mutual on that organisation's treatment of covid-19 support grant payments to businesses as income in insurance claims.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 25th November 2020

Following the letters issued by the Treasury and the Association of British Insurers at the end of September, in which the majority of insurers committed to not make deductions from business interruption insurance settlements to account for specific government grant funds, I am aware that NFU Mutual has continued to make such deductions. As stated in my letter, these grants are intended to provide emergency support to businesses at this time of crisis, and it is the Government’s firm expectation that they are not to be deducted from business interruption insurance claims.

As such, the Financial Conduct Authority (FCA) are looking into this matter further. The FCA sets the conduct standards required of insurance firms in relation to their business which aim to ensure customers are treated in a fair manner. You will note that the FCA has already written to relevant insurers providing clarification on how government support should be treated in claim calculations and asking that they consider very carefully the appropriateness of any deductions in the context of individual insurance policies. The FCA has also made it clear that it may intervene and take further actions where firms do not appear to be meeting the FCA’s expectations and treating their customers fairly, although neither the Government nor the regulator is able to confirm or comment on any discussions with individual firms.

I am monitoring this issue closely and will assess what, if any, further steps are needed to resolve this issue for policyholders.

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