Compliance Newsletter – May 2020

FCA seeks legal clarity on BI insurance for Covid-19
The FCA has announced that it intends to obtain a court declaration to resolve contractual uncertainty in business interruption (BI) insurance cover in the light of the coronavirus pandemic.It is also writing to a small number of firms seeking clarification about whether they are declining (or intend to decline) BI claims, asking for responses by 15 May 2020. Based on the information obtained, the FCA will consider which firms to ask to join the court process.

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FCA proposesnew premium finance guidance
The FCA has launched an urgent consultation on guidance for firms dealing with consumers and small business customers who may be finding it difficult to pay their insurance premiums or meet their premium finance payments as a result of coronavirus. The proposals include reducing monthly payments for affected customers or even suspending payments for up to three months.

The deadline for responses is 5pm on Tuesday 5 May 2020 and the guidance is expected to come into effect from 13 May 2020.

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FCA consults on new guidance on product value
Alongside the above consultation, the regulator is proposing new guidance calling on intermediaries and insurers to considerthe value of their products in the light of the exceptional circumstances arising out of Covid-19. Firms are expected toensure that products continue to offer value and are appropriate for customers, taking into account the impact of coronavirus on changes to the risks insured and the firm’s ability to deliver the benefits promised.This may require the provision of alternative, comparable benefits, reducing premiums for the duration of the change in value, or partial refunds of premiums already paid.

The deadline for responses is 5pm on Friday 15 May 2020 and the guidance is expected to come into effect from the end of May 2020.

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Lloyd’s launches international regulator C-19 information site
Lloyd’s has launched a new page on its website which holds details of bulletins and notices issued by international regulators regarding Coronavirus. The site is updated twice a week.

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FCA delays SCA implementation
The FCA has announced that, due to the Covid-19 crisis, it is giving the industry an additional six months to implement strong customer authentication (SCA) for e-commerce. The regulator’s aim is to minimise potential disruption to consumers and merchants. The new deadline is 14 September 2021.

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ICO issues statement: How we will regulate during coronavirus
The Information Commissioner’s Office (ICO) has issued a statement which in essence states that its approach will be flexible in the current situation, but intolerant of those wishing to taking advantage of it.

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EIOPA: Covid-19 statement reminding firms to continue considering consumers
The European Insurance and Occupational Pensions Authority (EIOPA) has issued a statement, asking insurers and intermediaries to continue to take actions to mitigate the impact of Coronavirus on consumers.

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The information provided in this Newsletter is based on the Managing General Agents’ Association’s knowledge and understanding of regulatory issues at the date of publication. However, it is generic in content, and matters in UK regulation change regularly. Members should take their own professional advice in connection with any issues which could affect their business. The Managing General Agents’ Association accepts no responsibility or liability for any actions taken based on the information contained within this Newsletter.

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