On 1 May 2020 we published draft guidance for insurance and premium finance firms on the fair treatment of customers in temporary financial difficulty as a result of coronavirus (Covid-19). This document summarises the feedback we received on our proposed measures and our response.
We wanted to act quickly to protect consumers in these difficult times. The draft guidance was therefore subject to a short consultation period, which closed on 5 May. We received 59 responses from interested stakeholders, including firms, trade bodies, consumer groups and individuals.
We are now publishing our finalised rules and guidance[2], subject to a small number of changes. These include amendments to:
- clarify that firms don’t have to consider an interest rate revision as a prerequisite to offering a payment deferral
- provide flexibility for firms to offer a payment deferral period of between 1 and 3 months
- clarify how the guidance applies to different types of insurance contract and customer
Who this affects
The rules and guidance affect a range of firms including:
- 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 collectorsÂ
- other firms that may be involved in insurance arrangements and/or in relation to the provision of premium finance
Actions and next steps
The guidance and rules[2] come into effect on Monday 18 May 2020.
We will review the guidance within 3 months of it coming into effect in light of developments around coronavirus to assess whether it is still needed.