The Financial Conduct Authority (FCA) has introduced proposals on how firms should continue to support customers who hold insurance and premium finance products and may be in financial difficulty due to coronavirus (Covid-19). The proposals consider the ways in which firms might provide support to consumers who have already had a payment deferral and to those newly in financial difficulty due to changed financial circumstances.
The FCA is introducing the additional guidance to help firms support customers reduce the impact of financial distress and ensure that products continue to meet customers’ needs.
The measures include:
- Re-assessing the risk profile of the consumer in case they might benefit from lower premiums;
- Considering whether other products might be offered which better meet the customer’s needs; and
- Providing support to help avoid the need to cancel the product.
Where the customer has a premium finance arrangement support might include allowing the customer to make temporary reduced payments, suspension or reductions to further interest or changes and allowing the customer a reasonable time to repay the debt.
The guidance applies to insurers, intermediaries and premium finance brokers and lenders.
If confirmed this additional guidance will come into force on 1 November 2020.