(Adds details)
By Kirstin Ridley and Carolyn Cohn
LONDON, Sept 30 (Reuters) - Britain's markets regulator said
on Wednesday it had failed to strike a deal with major insurers
over prompt payouts to small businesses battered by the
coronavirus pandemic, dashing hopes that a Supreme Court appeal
could be easily avoided.
The Financial Conduct Authority (FCA) set a Wednesday
deadline for talks with insurers, such as QBE and RSA
, to ensure eligible business interruption (BI) claims
would be paid speedily, after the High Court ruled earlier this
month that thousands had been wrongly rejected.
The regulator said it had hoped to reach an agreement with
the insurers on the interpretation of some important elements of
the judgment affecting "which businesses get paid and how much",
but conceded that the case was complex.
"We will continue discussions with insurers and action
groups to find a solution which resolves the outstanding issues
as soon as possible to enable pay-outs on eligible claims," it
said in a statement.
Businesses, from cafes to wedding planners and nightclubs,
have said they face ruin after attempts to claim for business
losses during the pandemic - which prompted a three-month
national lockdown in March and a series of stringent
restrictions since - were rejected by insurers.
Insurers disputed that many policies provided cover for the
pandemic, saying this would otherwise be catastrophic for the
industry.
The FCA and seven insurers have already applied for an
expedited appeal in a precautionary measure to help resolve the
case, that could affect 370,000 policyholders and billions of
pounds in insurance claims.
The FCA brought the case against QBE, Hiscox, RSA,
MS Amlin, Ecclesiastical, Argenta
, Zurich and Arch in June to clarify
whether 21 BI policy wordings covered government-ordered
closures and disruption to curb the spread of the virus.
Most insurers did not immediately respond to questions for
comment. Arch and Argenta declined to comment.
The FCA, which has been applauded for bringing the case on
behalf of struggling businesses, has said it could affect more
than 60 insurers and 700 policies because many have similar
wordings.
The judges examined policies that cover losses when insured
premises cannot be accessed because of public authority
restrictions, in the event of a notifiable disease and hybrid
wordings.
A London court hearing on Oct 2 is designed to clarify how
the judgment should be interpreted and pave the way for an
appeal to the Supreme Court.
(Additional reporting by Huw Jones; Editing by Kirsten Donovan)