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FCA wants deal on business insurance claims by Wednesday
29th Sep 2020 07:39
(Sharecast News) - The Financial Conduct Authority said it had filed an appeal in a test case on business interruption claims related to the Covid-19 pandemic in case insurers failed to reach a deal on payouts to policyholders by Wednesday.
Discussions continued "at speed" with the eight insurers and two intervenors that took part in a test case to reach an agreement in principle on a range of issues to avoid an appeal, the FCA said.
Thousands of businesses had claims rejected and face uncertain futures after they were forced to shutter stores during the government-imposed lockdown.
An agreement is needed by close of business on Wednesday, and seven insurer parties have made similar precautionary appeals, the FCA said.
One of the insurers, RSA, on Tuesday said it had sought leave to appeal and that a court hearing in relation to the appeal applications would take place on October 2.
Hiscox, which has also been involved in the case, said it had prepared to apply for an expedited appeal, adding that it "has not yet made a decision on whether it will seek to appeal".
Discussions are ongoing with the FCA and other parties to try to resolve any outstanding issues before the October 2 hearing in line with the original court ruling, Hiscox said.
"In the event that any party seeks permission to appeal, Hiscox may remain a party to any subsequent proceedings which could impact its ability to progress claims until the final outcome of the industry test case is known," the company said in a statement.
The High Court ruled earlier this month that insurers will have to pay out claims on business interruption policies.
The FCA brought the case, which argued for policyholders that the 'disease' and/or 'denial of access' clauses in a representative sample of policy wordings provided cover in the circumstances of the Covid-19 pandemic.
Discussions continued "at speed" with the eight insurers and two intervenors that took part in a test case to reach an agreement in principle on a range of issues to avoid an appeal, the FCA said.
Thousands of businesses had claims rejected and face uncertain futures after they were forced to shutter stores during the government-imposed lockdown.
An agreement is needed by close of business on Wednesday, and seven insurer parties have made similar precautionary appeals, the FCA said.
One of the insurers, RSA, on Tuesday said it had sought leave to appeal and that a court hearing in relation to the appeal applications would take place on October 2.
Hiscox, which has also been involved in the case, said it had prepared to apply for an expedited appeal, adding that it "has not yet made a decision on whether it will seek to appeal".
Discussions are ongoing with the FCA and other parties to try to resolve any outstanding issues before the October 2 hearing in line with the original court ruling, Hiscox said.
"In the event that any party seeks permission to appeal, Hiscox may remain a party to any subsequent proceedings which could impact its ability to progress claims until the final outcome of the industry test case is known," the company said in a statement.
The High Court ruled earlier this month that insurers will have to pay out claims on business interruption policies.
The FCA brought the case, which argued for policyholders that the 'disease' and/or 'denial of access' clauses in a representative sample of policy wordings provided cover in the circumstances of the Covid-19 pandemic.