Regulatory AlertsFS20/16: Coronavirus and customers in financial difficulty: feedback on draft additional guidance for insurance and premium finance firms
The Financial Conduct Authority has finalized additional guidance for insurers and premium finance firms to support customers in financial difficulty due to coronavirus after 31 October 2020. This document outlines stakeholder feedback and minor amendments to the draft measures, which are designed to protect consumers during the pandemic. The guidance takes effect on 1 November and remains in force until varied or revoked, while specific provisions from August guidance continue for existing payment deferrals ending after that date.
On 16 October 2020, we published proposals on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of coronavirus (Covid-19), after 31 October 2020. This document summarises the feedback we received on our proposed measures and our response.
Read FS20/16 (PDF)
Our additional guidance follows the temporary measures that have been in place since May this year. We wanted to act quickly to protect consumers in these difficult times. The draft additional guidance was therefore subject to a short consultation period, which closed on 20 October. We received responses from interested stakeholders, including firms, trade bodies and consumer groups.
Stakeholders expressed support for our measures and we have therefore finalised our additional guidance, with some amendments which are outlined in the Feedback Statement.
Who this affects
The guidance affects a range of firms including:
insurers
insurance intermediaries (including appointed representatives)
premium finance lenders that provide credit to fund the payment of insurance premiums in instalments
premium finance brokers that carry on regulated activities relating to credit granted for the purposes of financing insurance premiums in instalments
debt collectors
other firms that may be involved in insurance arrangements and/or in relation to the provision of premium finance
Next steps
The guidance comes into effect on 1 November and will remain in place until varied or revoked.
Although the August guidance expires on 31 October, for the avoidance of doubt, certain provisions of the August guidance remain in force beyond 31 October 2020. This is in respect of customers granted payment deferrals under that guidance which come to an end after 31 October 2020.
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