Context
In a letter to Stewarts LLP, the FCA has summarised its position in relation to the ongoing issues of BI-related court rings and their impact on claims following the COVID-19 pandemic, and responds to three issues that the law firm asked it to consider.
Key points to note and next actions
- When new court rulings are published, firms will need to consider carefully how the ruling may impact the interpretation of their policies, and their claims and complaints handling, considering their obligations to their customers.
- Where it is identified that a new court ruling has a possible wider beneficial impact for customers, the FCA expects firms to provide:
- details of any proposed remedial action to ensure that the beneficial impact of the final outcome is applied to similar groups of customers, and/or those customers potentially affected; and/or
- where appropriate, reasons why such remedial action may not be carried out.
- Where it has been determined that a new court ruling has no wider beneficial impact, the FCA would expect firms to explain to their customers why it was considered that there was no wider beneficial impact to other potentially similarly impacted, or other potentially affected, customers.
- At this stage the FCA is not proposing any further interventions, but it continues to supervise firms to ensure they are meeting its expectations.
- The FCA’s expectations of insurers make clear that firms will need to consider how new court rulings affect claims they have already decided and whether to reopen those claims, considering their obligations to their customers, including their obligations under FCA rules.
- Any re-consideration of claims and their reassessment would need to be carried out in line with firms’ obligations under FCA rules. The FCA expects that, where claims have already been made in line with the time limits required by the policy but have been inappropriately rejected or under-paid in light of the new ruling, those will need to be looked at in line with FCA expectations