United Kingdom

Topic: Insurance

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FCA reminds professional indemnity insurance underwriters to meet regulatory requirements when including pandemic exclusions

In its latest regulatory round-up, the Financial Conduct Authority (FCA) has reminded insurers offering professional indemnity insurance of its Handbook requirements. Insurance firms applying pandemic exclusions are reminded of the minimum requirements in MIPRU 3.2 and should consider whether exclusions are consistent with product governance obligations to ensure that the policy is compatible with the … Continue Reading

‘Dear CEO’ letter sent by FCA to BI insurance firms reminding them to pay claims quickly or be clear about reasons for waiting for appeal to recent high court judgment

A ‘Dear CEO’ letter written by Christopher Woolard, interim chief executive of the Financial Conduct Authority (FCA), has been sent to firms writing business interruption insurance cover following the judgment handed down in The Financial Conduct Authority v Arch and Others (Test Cast). Mr Woolard thanks the firms who participated in the Test Case for … Continue Reading

FCA proposes measures to address problems identified in general insurance pricing practices

The Financial Conduct Authority (FCA) has published the final report in its study of general insurance pricing practices (MS18/1). The final report follows a two year study into pricing in the general insurance sector in the UK. An interim report was published in October 2019 setting out interim findings. Alongside the final report the FCA … Continue Reading

FCA sends ‘Dear CEO’ letter to insurance intermediaries on its supervision strategy for personal and commercial lines

The Financial Conduct Authority (FCA) has sent a ‘Dear CEO’ letter from Roma Pearson, Head of Department, Retail General Insurance, to intermediary firms setting out the key risks posed by insurance intermediaries to customers. The letter asks firms to consider the extent to which the risks identified exist in their business and assess strategies to … Continue Reading

PRA Dear CEO letter: Temporary Permissions Regime – Operational Readiness

On 1 September 2020, the Prudential Regulation Authority (PRA) published a Dear CEO letter from Sam Woods, Deputy Governor and CEO of the PRA to remind firms to be operationally ready for the Temporary Permissions Regime (TPR). The TPR is due take effect at 11pm on Thursday 31 December 2020, which is the point at … Continue Reading

New Bank of England webpage on the Temporary Permissions Regime

On 1 September 2020, the Bank of England (BoE) published a new webpage, which summarises its approach to the Temporary Permissions Regime (TPR). On this new webpage the BoE has confirmed the following: Firms that have submitted a valid Notification or Part 4A application (and not withdrawn) will automatically enter the TPR. Where a firm … Continue Reading

FCA publishes statement on the provision of data under the Civil Liability Act 2018

The Civil Liability Act 2018 (and subsequent Civil Liability (Information Requirements) and Risk Transformation (Amendment) Regulations 2020) requires that certain insurers (broadly, those insurers writing more than 100,000 private motor policies a year) must submit data to the Financial Conduct Authority (FCA) about the effect that the Civil Liability Act 2018 will have on motor … Continue Reading

FCA publishes statement on non-damage business interruption settlements and deductions in relation to Government support

In response to concerns expressed about how insurers are calculation non-damage business interruption (BI) claims payments where liability has been agreed, the Financial Conduct Authority (FCA) has published a statement on deductions being made for Government support received.  Over the past few months many BI claimants have received some form of Government support in response … Continue Reading

European Commission publishes paper setting out best-practice examples in relation to insurers’ COVID-19 measures

The European Commission has published a paper setting out examples of best-practices relating to relief measures offered to the customers of financial services businesses in the COVID-19 crisis. The best-practice paper includes examples relevant to insurance. The paper is the outcome of two roundtables including a number of participants from across the financial services industries, … Continue Reading

European Commission publishes a notice to stakeholders on the withdrawal of the UK from the EU (re)insurance market

On 13 July 2020, the European Commission published a notice to stakeholders on the effects of the end of the transition period after which the UK’s relationship with the EU will fundamentally change. The notice is aimed at EU (re)insurance companies and insurance distributors. The Commission advises firms to assess the consequences of the end … Continue Reading

Lloyd’s announces timetable for the launch of its new third-party oversight regime

In July 2019 Lloyd’s announced (in Market Bulletin Y5257) proposals to introduce a new oversight framework for third-parties operating in the market.  On 1 July 2020, Lloyd’s announced in a further Market Bulletin (Y5296) that the framework would be brought into effect on 30 September 2020. The new framework aims to ensure that arrangements with … Continue Reading

FCA confirms guidance for insurers and intermediaries on how they should consider the impact of COVID-19 on product value

The FCA has finalised guidance on what it believes insurers and insurance intermediaries should be doing to identify issues relating to COVID-19 that affect the value of insurance products. The guidance is intended to highlight areas where firms might prioritise product reviews in light of the pandemic. The FCA expects firms to consider how the … Continue Reading

Updates from the FCA on its business interruption test case

On 10 June 2020, the FCA announced on its website that it had started proceedings in the High Court to resolve uncertainty over the validity of business interruption insurance claims. The test case in which the FCA is claimant and several insurance companies are defendants is brought pursuant to the Financial Markets Test Case Scheme. … Continue Reading

FCA provides an update on the test case on the validity of business interruption insurance claims

On 1 June 2020, the Financial Conduct Authority (FCA) provided an update on the progress of its test case on the validity of business interruption insurance claims. The update also provides a representative sample of 17 policy wordings that capture the majority of the key issues that are likely to be in dispute. Insurers had … Continue Reading

UK Government to provide trade credit insurance guarantee scheme

John Glen, Economic Secretary to the Treasury, has announced that the UK Government will guarantee business-to-business transactions supported by trade credit insurance. The guarantee will enable trade credit insurers to maintain coverage during the coronavirus (COVID-19) pandemic. The guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market. The … Continue Reading

FCA sets expectations for insurers during COVID-19 outbreak

Through a series of statements released on May 1, 2020, the Financial Conduct Authority (FCA) made clear its expectations of the insurance sector in light of coronavirus (COVID-19). The FCA: Proposes to seek clarity on whether a sample of wordings in business interruption policies do, in fact, provide coverage for COVID-19, via a declaratory judgment in … Continue Reading

FCA publishes Product value and coronavirus: draft guidance for insurance firms

On 1 May 2020, the Financial Conduct Authority (FCA) published guidance setting out their expectations for insurers and insurance intermediaries to consider the value of their products in light of the exceptional circumstances arising out of coronavirus (Covid-19). The guidance applies to all firms carrying on regulated activities relating to all non-investment insurance products, i.e. … Continue Reading

FCA to obtain court declaration to resolve contractual uncertainty in business interruption insurance cover

On 1 May 2020, the Financial Conduct Authority (FCA) released a statement that it intended to obtain a court declaration in order to resolve contractual uncertainty in business interruption insurance cover. The FCA is taking this action to resolve uncertainty surrounding business interruption claims in the context of business closures in the light of coronavirus … Continue Reading

FCA makes statement on its website about professional indemnity insurance for financial advisers

The Financial Conduct Authority (FCA) has published a statement on its website concerning the ability of financial advisers to get professional indemnity insurance (PII). PII is a requirement for a number of authorised persons under FCA rules. The FCA writes that it is aware that insurers providing PII cover may seek additional information during the … Continue Reading

FCA publishes ‘Dear CEO’ letter to insurance firms regarding the conduct of business interruption claims

On 15 April 2020, the Financial Conduct Authority (FCA) published a Dear CEO letter regarding conduct in relation to business interruption insurance for SMEs concerning Covid-19. In the letter the FCA outlines that insurers and brokers have an essential role to play in supporting their customers who may be unclear whether they have appropriate cover … Continue Reading

EIOPA publishes opinion on the supervision of remuneration principles in the insurance sector

The European Insurance and Occupational Pensions Authority (EIOPA) has published an opinion to promote consistent approaches to the supervision of remuneration. While the Solvency II Delegated Regulation provides requirements on remuneration, these are sufficiently high level and allow room for discretion. This opinion provides guidance to EU national supervisory authorities on how to apply the … Continue Reading

The insurance sector and COVID-19 – how has the pandemic affected the UK market?

COVID-19 (coronavirus) has had a devastating impact on people’s lives across the world and has caused the global economy to stall, the impact to affect businesses for years to come. Insurance companies face losses as a result of the pandemic but have by and large been prepared for such an outbreak as part of their … Continue Reading

Financial Ombudsman Service: Coronavirus (Covid-19): information for businesses

The Financial Ombudsman Service (FOS) has published some operational information about their service that might be helpful for businesses, and sets out some detail about their approach to complaints caused or affected by Coronavirus. In relation to travel insurance The FOS will pay particular attention to: individual circumstances, policy terms, when bookings were made and … Continue Reading

PRA publishes ‘Dear CEO’ letter to UK insurers regarding distribution of profits

On 31 March 2020, the Prudential Regulation Authority (PRA) published a Dear CEO letter from Sam Woods, Deputy Governor, to the CEOs of UK insurers regarding distribution of profits. The letter outlines an expectation on insurers to pay close attention to the need to protect policyholders and maintain safety and soundness in order to ensure … Continue Reading