The Financial Conduct Authority has provided an update on progress regarding its proposed court action to resolve uncertainties about business interruption policies.
The update provides an initial list of the representative sample of policy wordings that will be examined in the action. 17 policy wordings have been selected so far, which, according to the FCA, capture the majority of the key issues that could be in dispute. 16 insurers have been identified as using at least one of those wordings. Of those, the following eight insurers have so far agreed to assist by participating in the test case:
- Arch Insurance (UK) Limited
- Argenta Syndicate Management Limited
- Ecclesiastical Insurance Office plc
- Hiscox Insurance Company Limited
- MS Amlin Underwriting Limited
- QBE UK Ltd
- RSA Insurance Group plc
- Zurich Insurance plc
These insurers have entered into a framework agreement with the FCA governing the process and the timetable. This contemplates a trial (5-10 days) in the second half of July.
The FCA has published a short consultation on draft guidance, which seeks more information from insurers about whether their policy wordings would be affected by the outcome of the case. In early July, the FCA expects to publish a full list of the insurers and the policies that may be affected.
The draft guidance also sets out the FCA’s expectations of all insurers handling BI claims pending the court’s decision.
The FCA seeks comments on the draft guidance by 5 June.