(Adds more detail)
By Huw Jones
LONDON, Jan 22 (Reuters) - Insurers face enforcement action
if they don't pay up as soon as possible on business insurance
claims following a landmark court ruling, Britain's Financial
Conduct Authority said on Friday.
The Supreme Court earlier this month ruled that many
business insurance policies should cover losses caused by
coronavirus lockdowns, and the FCA said insurers should now pay
up as soon as possible on valid claims.
"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," the FCA's executive director
for consumers and competition Sheldon Mills said in a letter to
insurers' chief executives.
The watchdog brought the test case on behalf of
policyholders last June, saying it could affect 370,000
policyholders and 60 insurers, paving the way for an estimated
1.2 billion pounds ($1.6 billion) of claims.
Six of the world's largest commercial insurers - Hiscox
, RSA, QBE, Argenta, Arch
and MS Amlin - argued many business
interruption policies did not cover widespread disruption after
government efforts to curb the virus from last March.
But the UK Supreme Court unanimously dismissed appeals by
the insurers in a comprehensive victory for the regulator and
policyholders.
Mills said the FCA will request data regularly from insurers
on their progress in handling claims, and on how many have been
settled.
"Our intention is to publish some of these data," Mills
said.
The court judgments in the test case give insurers the
clarity they need to now conclude their claims processes with
the large majority of their business insurance customers, Mills
said.
Some previously rejected claims and complaints are now valid
or the values of claims have changed, he said
"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."
($1 = 0.7319 pounds)
(Reporting by Huw Jones; Editing by Hugh Lawson and Jan Harvey)
