Thank you for contacting me about COVID-19 and insurance.
I have spoken with colleagues at the Treasury to understand how the insurance industry is being effectively regulated during the COVID-19 pandemic. We are in agreement that the insurance industry should act fairly and consider the needs of individuals during this crisis, including understanding the changing demand and risk caused by the crisis.
The Financial Conduct Authority has made it very clear to the insurance industry that they should show flexibility in their treatment of customers effected by COVID-19, and that they would not expect customers to have their ability to claim impacted by circumstances over which they have little control. FCA rules require insurers to handle claims promptly, provide timely information on a claim’s progress, not reject a claim unreasonably, and settle claims in good time once terms are agreed.
Fair treatment must be extended to customers during purchase, claim, and renewal. Firms should have clearly communicated any policy exclusions that result from the virus to their existing customers.
I sincerely hope that firms understand the FCA’s position. As always, you can make the FCA aware of suspected malpractice through its complaints service. The Financial Ombudsman Service (FOS) will investigate complaints about insurance, investigating individual complaints on the basis of policy wording, industry codes of conduct, relevant evidence such as medical reports, and other criteria.
I hope this provides some reassurance at this difficult time.