Business: Insurance
The question
To ask the Chancellor of the Exchequer, what discussions she has had with the Financial Conduct Authority on the regulatory consistency of allowing insurers to deduct Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme payments from business interruption claims, whilst prohibiting the deduction of Local Authority Grants.
Answered by Rachel Blake
The Government has not made an assessment of the total monetary value of insurance company deductions from business interruption insurance payouts.
The Supreme Court published its final judgment in the FCA’s Business Interruption Insurance test case in 2021. At the time of the judgment, the FCA set out its expectation that insurers should communicate to all impacted policyholders what the judgment meant for their claim and should move quickly to resolve claims as determined by the judgment.
The FCA court case did not cover all potential issues with business interruption policies. The FCA has been clear that, in the event of further court rulings, insurers will need to consider carefully how the rulings impact claims they have already decided.
The FCA is continuing to supervise firms to ensure they are meeting their expectations and has robust powers to take action where necessary.
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