Recent regulative developments of interest to insurance companies and their intermediaries. See also our General regulative news in the Related Products links.
- COVID-19: Judgment in FCA’s service disruption insurance coverage test case
- COVID:19: FCA talk about pandemic exemptions in PII for general insurance coverage and mortgage intermediaries
COVID-19: Judgment in FCA’s service disruption insurance coverage test case
The High Court has actually handed down judgment in FCA v Arch Insurance coverage (UK) Ltd and others  EWHC 2448 (Comm) (15 September 2020), the test case brought by the UK Financial Conduct Authority (FCA) looking for legal clarity on the significance and result of specific non-damage service disruption (BI) insurance plan wordings.
The judgment is intricate, attending to cover for COVID-19 associated claims under 21 individual policy wordings. We have a look at the ramifications for insurance policy holders and insurance companies in our separate instruction: Analysis: the FCA Company Disruption Test Case judgment.
The FCA has actually released a press release and updated its webpage on the test case to sum up the crucial elements of the judgment and outline the next steps. The FCA states that a hearing will soon be repaired with the High Court, where any applications for appeal will likely be made.
Unless effectively appealed, the judgment is legally binding on the offender insurance companies relating to the analysis of the representative sample of policy wordings considered by the court. The FCA keeps in mind that it also supplies “convincing assistance” for the analysis of similar policy wordings and claims, which can be taken into account in other lawsuit including in Scotland and Northern Ireland, by the Financial Ombudsman Service (FOS) and the FCA in thinking about whether insurance companies are dealing with claims fairly.
COVID:19: FCA talk about pandemic exemptions in PII for general insurance coverage and mortgage intermediaries
The FCA has actually released its most current Policy Round-up. Among other things, it consists of remarks associating with pandemic exemptions in expert indemnity insurance coverage (PII) for general insurance coverage (GI) and mortgage intermediaries.
The FCA keeps in mind that some PII insurance companies are presenting exemptions following the COVID-19 pandemic. It reminds companies of the need to meet FCA rules and highlights the following as some of the pertinent requirements in this area:
- GI and mortgage intermediaries’ PII must meet the minimum requirements in MIPRU 3.2;
- companies ought to consider whether exemptions are consistent with their product governance responsibilities including, under PROD 4.2, whether the product works with the requirements, qualities and goals of the target audience; and
- companies distributing PII will require to meet ICOBS requirements. This consists of the need to consider whether an exclusion is consistent with the requirements of their customer under ICOBS 5.2.
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