Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with the Financial Conduct Authority on the potential impact of insurers failing to proactively contact affected policyholders on the level of risk of limitation periods for Covid Business Interruption claims expiring.

The Government meets regularly with the Financial Conduct Authority (FCA) to discuss a variety of issues, including in relation to insurance markets. The FCA, as the independent regulator for financial services, sets the conduct standards required of insurance firms. This includes rules requiring insurers to handle claims fairly and promptly.

The Supreme Court published its final judgment in the FCA’s Business Interruption Insurance test case in 2021. At the time of the judgment, the FCA set out its expectation that insurers should communicate to all impacted policyholders what the judgment meant for their claim and should move quickly to resolve claims as determined by the judgment.

The FCA court case did not cover all potential issues with business interruption policies. The FCA has been clear that, in the event of further court rulings, insurers will need to consider carefully how the rulings impact claims they have already decided.

The FCA is continuing to supervise firms to ensure they are meeting their expectations and has robust powers to take action where necessary.