* Hundreds of thousands of small firms seek payouts
* Insurers argued COVID-19 not applicable
* High Court ruled they were wrong in many cases
* Regulator seeks to avoid appeals process
(Adds QBE, MS Amlin, Zurich, background)
By Huw Jones and Carolyn Cohn
LONDON, Sept 29 (Reuters) - Britain's financial regulator
said on Tuesday it had filed for an expedited appeal in a
business interruption test case against insurers, but was
seeking an agreement by Wednesday to avoid the appeals process
altogether.
Hundreds of thousands of mainly small British businesses are
waiting to hear if their insurer will pay out imminently, or
keep them waiting while they appeal the case brought by the
Financial Conduct Authority (FCA) against eight insurers.
An agreement is needed by close of business on Wednesday,
the FCA said in a statement.
London's High Court has ruled that some of the world's
biggest insurers were wrong to reject claims from small firms
battered by the COVID-19 pandemic.
The court found in favour of policyholders’ arguments on the
majority of key issues, the FCA said earlier this month.
The case is being closely watched in Britain and overseas as
it is estimated to impact 370,000 policyholders across more than
60 insurers, with similar policy wordings and billions of pounds
in claims.
The FCA said it continues to "work closely and at speed"
with the eight insurers and two intervenors that participated in
the test case to reach agreement in principle on a range of
issues, so avoiding an appeal. It said seven insurer parties had
also made precautionary appeal filings.
A court hearing in relation to the appeal applications will
take place on Oct 2.
RSA, one of the insurers involved, said it has sought leave
to appeal while another, Hiscox, said it had taken the necessary
steps to apply for an expedited appeal but "has not yet made a
decision on whether it will seek to appeal".
Discussions are ongoing with the FCA and other parties to
try to resolve any outstanding issues before the Oct 2 hearing,
Hiscox said. QBE and MS Amlin also said
they had sought leave to appeal.
Zurich Insurance said it had not filed an
application to appeal as the ruling confirmed that its policy
wordings did not provide cover for business interruption in
relation to the pandemic.
Talks had been taking place all weekend between the FCA and
insurers, but were not resolved before the appeal application
deadline, according to one source familiar with the matter.
Interpretation of some aspects of the ruling was causing a
stumbling block, the source added.
(Reporting by Huw Jones; Editing by Dhara Ranasinghe, Sinead
Cruise and Philippa Fletcher)