Coronavirus

FCA outlines additional support for insurance customers

The FCA has published proposals on how firms should continue to support customers who hold insurance and premium finance products and are struggling financially due to the pandemic.

The outlined measures will come into effect after 31 October 2020, with the latest guidance following temporary measures that have been in place since May.

The latest guidance outlines how firms should provide tailored support to consumers who have already had a payment deferral, as well as those in new financial difficulty due to changed circumstances relating to Covid-19.  

For insurance arrangements, the new measures include re-assessing the risk profile of consumers to see whether they could be offered lower monthly payments.

Insurers must also consider whether other products can be offered which “better meet” the consumer’s needs, as well as provide help to “avoid the need to cancel necessary cover”.

Where customers hold premium finance credit regulated agreements, help could include allowing the customer to make no or reduced payments for a specified period, as well as suspending, reducing, waiving or cancelling any further interest or charges.

In addition, providers could “allow the customer a reasonable time and opportunity to repay the debt, including by deferment of payment of arrears”. 

The measures in the latest guidance differ from earlier measures as firms are no longer expected to proactively contact all consumers who miss payments. 

However, the FCA said they should still consider “whether it’s appropriate” to contact a customer to offer support if they have missed a payment, as well as consider what steps they should take where a customer could be vulnerable.

The FCA added that firms should “make the different options available to consumers clear in their communications”, including on websites and apps, and “encourage them to make contact if they are experiencing financial difficulties”. 

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