LONDON, April 15 (Reuters) - Most insurance policies bought
by smaller companies do not cover for disruption caused by the
coronavirus pandemic, Britain's Financial Conduct Authority said
on Wednesday.
Britain is in lockdown, with many companies shuttered and
millions of people furloughed as the country heads for a deep
recession.
The FCA said most company insurance policies only gave basic
cover, with no obligation to pay out in relation to the COVID-19
pandemic.
"While this may be disappointing for the policyholder we see
no reasonable grounds to intervene in such circumstances," FCA
interim chief executive Christopher Woolard said in a letter to
heads of insurers.
"In contrast, there are policies where it is clear that the
firm has an obligation to pay out on a policy. For these
policies, it is important that claims are assessed and settled
quickly."
Such valid claims should be paid as soon as possible, such
as by starting with an interim payment, as many insurers were
already doing, Woolard said.
"If you disagree with doing so, we would like you to send to
us the grounds for reaching that decision including how you
believe it represents a fair outcome for customers. Your firm's
decision is likely to help inform our assessment of its
culture," Woolard said.
(Reporting by Huw Jones
Editing by Tommy Reggiori Wilkes)