Regulator warns insurers to settle BI claims promptly

The FCA has told insurers to be quick and transparent in settling BI claims or face the full force of its powers.

In a ‘Dear CEO’ letter, Sheldon Mills, executive director at the FSA, said: “We believe the court judgments in the test case give all insurers the clarity they need to now conclude their claims processes with the large majority of their BI customers.

“We encourage all insurers to do so as quickly as possible. In some cases the judgment will mean that previously rejected claims (and complaints) are now valid or that the value of customers’ valid claims will have changed. We expect you to be clear on these points and on your next steps as you write to all your policyholders with affected claims or complaints over the coming week.”

Mills said the regulator expected, “all insurers to take a pragmatic, transparent and consistent approach to their interactions with policyholders over remaining evidence and loss adjusting processes that apply to individual claims, rather than these creating additional barriers or delays to paying valid claims. This includes in relation to evidence for proving the presence of Covid-19 for ‘disease’ coverage clauses.”

He added: “The Supreme Court judgment on the test case has brought clarity and certainty for all parties. It is critical that this results in all insurers paying valid claims in full as soon as possible to support their customers during the current situation. Where we see that insurers are not meeting the expectations set out here, we will use the full range of our regulatory tools and powers to ensure they do so.”

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