More help could be on the way for insurance customers suffering temporary financial difficulties because of the pandemic.
The Financial Conduct Authority today (Jul 24) announced plans to extend until October 31 the guidance help that is already in place for firms.
The original measures came into effect on May 18, with the City regulator saying they’d be reviewed after three months. It now wants a brief consultation in order to act quickly, and wants comments on its proposal by 5pm on Tuesday, July 28.
Insurance firms need to continue to consider what options they can offer customers, it said.
If a payment deferral isn’t in a customer’s best interests, measures could include cutting premiums because of a change in the policyholder’s risk profile or offering a different product better suited to their needs and waiving any fees normally charged if cover is changed.
Where amendments to the insurance cover wouldn’t help ease temporary payment difficulties, firms will be expected to grant a payment deferral of between one and three months, unless it was obviously not in the customer’s interest.
The FCA emphasised that it was important customers didn’t leave themselves uninsured, and that their insurance cover met their demands and needs.
It added that people struggling to afford their insurance or premium finance payments because of the impact of coronavirus should get in touch with their insurer or insurance broker to discuss options.
The draft guidance doesn’t stop firms from bringing in their own extra support measures for customers.
Similar steps have already been taken to extend help over other financial products, such as mortgages.
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