FCA Proposes More Measures to Help Insurance Customers Amid Crisis
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020. The proposed guidance sets out how firms should provide tailored support to consumers who have already had a payment deferral and those newly in financial difficulty due to the changed circumstances related to COVID-19 outbreak. This guidance follows the temporary measures that have been in place since May this year. Comments could be provided until October 20, 2020 and, if confirmed, this additional guidance will come into force by November 01, 2020.
The aim of the guidance is to prompt firms to help qualifying customers, where possible, to reduce the impact of financial distress and ensure that customers continue to have insurance that meets their demands and needs. For insurance arrangements, this includes measures such as:
- Re-assessing the risk profile of the consumer to see whether they could be offered lower monthly payments
- Considering whether other products can be offered which better meet the consumer’s needs
- Providing 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
- Suspending, reducing, waiving or cancelling any further interest or charges
- Allowing the customer a reasonable time and opportunity to repay the debt, including by deferment of payment of arrears
The measures in this guidance differ from the measures in the earlier guidance. In this guidance, firms are not expected to proactively contact all consumers who miss payments. However, they should still consider whether it is appropriate to contact a customer to offer support if they have missed a payment. These measures follow the guidance published in August 2020, under which the expectation to grant payment deferrals expires on October 31. This guidance applies to regulated firms operating in the insurance and premium finance markets. This includes insurers, insurance intermediaries (including appointed representatives), premium finance lenders that provide credit to fund the payment of insurance premiums in instalments, premium finance brokers that carry on regulated activities relating to credit granted for the purposes of financing insurance premiums in instalments, debt collectors, and other firms that may be involved in insurance arrangements and/or the provision of premium finance.
Related Guidance
Keywords: Europe, UK, Insurance, COVID-19, Payment Deferrals, FCA
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EBA Publishes Single Rulebook Q&A Updates in February 2021
The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to ten questions.
ESMA Releases Schema and Instructions for Securitization Reporting
ESMA updated the set of questions and answers (Q&A), along with the reporting instructions and an XML schema for the templates set out in the technical standards on disclosure requirements, under the Securitization Regulation.
EU Rule Amends Requirement for European Single Electronic Format
EU published Regulation 2021/337, which amends the Transparency Directive (2004/109/EC), regarding the use of the single electronic reporting format for annual financial reports.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.