Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he has taken to encourage insurers to pay out to customers with business interruption policies.

The Government is in continual dialogue with the insurance sector regarding its response to this unprecedented situation.

The Financial Conduct Authority rules require insurers to handle claims fairly and promptly and in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.

On 1 May the Financial Conduct Authority (FCA) outlined its intention to seek a court declaration, on an agreed and urgent basis, and for a selected number of key issues, to resolve uncertainty for many customers making business interruption claims. The High Court published its judgment in the court case on 15 September. On 2 November, the Supreme Court granted permission for the FCA and insurers to appeal if it was not possible to resolve the outstanding issues in the interim period. The hearing took place from 16 to the 19 November and the judgement will be published in December or January next year. The FCA and insurers had agreed that they would seek to have any appeal heard on an expedited basis, given the importance of providing legal clarity to policyholders as soon as possible.

In a letter to the ABI on 25 September, the Government also outlined its firm expectation that grant funds intended to provide emergency support to businesses at this time of crisis are not to be deducted from business interruption insurance claims. Many members have agreed not to make these deductions. The Government will consider further action if this practice continues.