LONDON, Aug 3 (Reuters) - Insurers that do not treat
customers fairly when calculating payouts for business
interruption due to the coronavirus crisis will face action by
Britain's markets watchdog.
The Financial Conduct Authority (FCA) has taken eight
insurers to court over business interruption policy wordings,
which the insurers say do not cover the pandemic, with a ruling
expected in mid-September.
But the case does not address how any resulting claims
payments would be calculated, the FCA said on Monday.
"We may intervene and take further actions where firms do
not appear to be meeting our expectations and treating their
customers fairly," the FCA said in a statement.
Some insurers were making deductions for government loans -
which businesses had received as a result of the pandemic - when
calculating payouts.
The FCA said this could be appropriate but insurers should
not take a one-size-fits-all approach and make uniform
deductions.
"Insurers are likely to need to consider individually the
precise details of the policy, the claim and the use and
application of the government support the policyholder
received," the FCA said.
Similar wordings to those in the test case were used by more
than 60 insurers and could affect 370,000 policyholders, the FCA
has said.
Insurers are already paying claims on some business
interruption policies. The Association of British Insurers said
its members expected to pay 900 million pounds in such claims
this year due to the pandemic.
Analysts said a win for the FCA could take the size of those
payments to billions of pounds.
(Reporting by Carolyn Cohn;
Editing by Alexander Smith)
