(Adds detail, background)
By Huw Jones and Carolyn Cohn
LONDON, May 1 (Reuters) - Britain's financial watchdog said
it would urgently ask the courts to clarify uncertainty over
whether businesses can claim compensation for disruption caused
by the coronavirus pandemic.
A national lockdown to fight the pandemic has forced many
companies to temporarily suspend operations and furlough staff.
"We have been clear that we believe in the majority of cases
business interruption insurance was not purchased to, and is
unlikely to, cover the current emergency," Financial Conduct
Authority interim chief executive Christopher Woolard said in a
statement on Friday.
"However, there remain a number of policies where it is
clear that the firm has an obligation to pay out."
The FCA is seeking a declaration from the court to resolve a
"selected number of key issues causing uncertainty as promptly
as possible" and provide greater clarity for insurers and their
customers.
The watchdog said court action would not determine how much
is payable under individual policies, but will provide the basis
for doing so.
Lloyd's of London insurer Hiscox is among firms that
have come under pressure from small businesses to pay out for
business interruption, along with FTSE 100 insurer RSA
and Australian firm QBE.
The insurers did not immediately respond to comment on
Friday. They have previously said they seek to pay valid claims
quickly.
The FCA also set out measures to support consumers and
businesses who hold insurance products and who are facing other
issues as a result of coronavirus.
The package sets out the watchdog's expectations that
insurers should consider whether their products still offer
value to customers in the pandemic and whether they can be doing
more for those suffering a financial impact because of
coronavirus, the FCA said.
The watchdog said that insurers should grant premium payment
holidays to customers, if requested, for a rolling period of up
to three months. The measures come into effect on May 13.
(Reporting by Huw Jones; editing by Carolyn Cohn, Kirsten
Donovan)
