FCA confirms the implementation of temporary measures which aim to support customers facing financial difficulty due to the impacts of Coronavirus.

As of Monday 18 May 2020, Firms are being asked to take account of new FCA guidance on how best to treat customers fairly at this time when for many COVID 19 is having a direct economic impact on their customers financial position.

For the purposes of the guidance the FCA is asking firms wherever possible , ‘ to help qualifying customers reduce the impact of temporary financial distress’ and to ‘ensure that customers continue to have insurance that meets their demands and needs.’

The guidance goes as far as to suggest actions firms should be taking when they identify a customer in “temporary” financial distress, and what options they are able to provide to ensure that they consider to deliver a fair outcome for their customers ,  recommendations to  include :

• (Re) assessing the risk profile of the customers as this may have changed due to the impacts of COVID 19 – and goes as far as to request firms to consider reducing premiums.
• Requesting firms to (re) consider alternative and/or more appropriate, products which better suit meet the customer’s needs – as these too could have changed over the period – and revise the cover accordingly.
• Firms should work with customers to avoid cancellation of necessary cover, this can be done by considering payment deferrals, which the guidance outlines in detail. If amendments to the insurance cover do not reduce payment difficulties the FCA’s guidance outlines that it expects insurers to offer payment deferrals unless not in the customer’s interests. These deferrals should be granted for a minimum period of between one and three months and a customer should be able to request one at any point up until 18^th August 2020.
• The FCA also suggests that if a deferral is not the appropriate option for a customer, firms should accept reduced payments, waive missed or late payments and allow customers to change their repayment date without charge.
• Firms are also asked to consider fair treatment of customers when assessing new premiums for those who have had to cancel and then return to the insurer.

The FCA has suggested firms make their options to customers clear in their communication , including making changes to websites and apps where necessary to provide the right information, and encourage their customers to contact them if they are experiencing any financial difficulty due to Coronavirus.

They have added that the temporary measures will be reviewed again within the next three months , with the possibility that they may be revised and/or extended  and that if a firm believes they are unable to implement appropriate processes in time they should contact the FCA at the earliest possible opportunity.

Click Here to read the full detailed guidance : https://www.fca.org.uk/publications/finalised-guidance/coronavirus-customers-temporary-financial-difficulty-guidance-insurance-premium-finance