In an update this morning (June 1) the regulator confirmed it had selected the 17 policy wordings which will be used in the court case to represent key issues in dispute between policyholders and insurers.
At the beginning of last month the watchdog announced it intended to place before the courts a sample of cases in which it was uncertain whether a business was covered by its business interruption insurance for losses caused by the virus fallout.
Business interruption insurance covers a firm for loss of income during periods it cannot carry out business as usual due to an unexpected event.
The FCA has now identified the representative sample of policy wordings to be examined in the test case and insurers that use those wordings.
The regulator said the initial list of insurers and the policy wordings they used was not exhaustive, and it has published a short consultation on draft guidance asking all insurers to check their policy wordings against those it intends to test to see if theirs will be impacted by the outcome of the case.
The document also sets out the FCA’s expectations of all firms handling business interruption claims and any related complaints between now and the court decision.
The FCA expects to publish a list of all the relevant insurers and policies that may have impacted wordings in early July.
Christopher Woolard, interim chief executive at the FCA, said: “The court action we are taking is aimed at providing clarity and certainty for everyone involved in these business interruption disputes, policyholder and insurer alike.
“We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market.
“The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.”
It has now asked the following insurers to participate in the High Court test case:
- Arch Insurance (UK) Limited
- Argenta Syndicate Management Limited
- Ecclesiastical Insurance Office plc
- Hiscox Insurance Company Limited
- MS Amlin Underwriting Limited
- QBE UK Ltd
- Royal & Sun Alliance Insurance plc
- Zurich Insurance plc
Ultimately, the watchdog says it wants to “achieve clarity for all concerned in an unprecedented situation.”
