We understand the financial impact that Covid-19 is having on individuals and businesses across the country. A question you may be asking is:
‘As a result of Covid-19 what happens if I can’t afford to pay for my policy?’
Most of our Commercial and Retail Insurance policies are arranged via insurance brokers/MGAs, so in the first instance please contact your broker/MGA to discuss your needs and what assistance may be available.
If you have a direct debit under a Regulated Credit Agreement with New India Assurance and need our assistance please contact us on 01473 233626 between 9 am to 5pm Monday to Friday (excluding Bank Holidays).
FCA Test case:
Update to policyholders with potentially affected Covid-19 Business Interruption claims
Due to the widespread impact of the COVID-19 pandemic and the extent of repudiated insurance claims for business interruption, the Financial Conduct Authority (FCA) had decided to intercede in this matter. They sought to obtain legal Judgment on how a number of insurance products should respond to the COVID-19 outbreak and the subsequent Government Coronavirus Regulations. These are referred to as the “test case”.
The First Instance Judgment
The trial of the test case in the High Court commenced on 20th July 2020 and lasted 8 days. The Court examined 21 representative sample policy wordings issued by 8 different insurers. A decision by Lord Justice Flaux and Mr Justice Butcher of the High Court (also referred to as the ‘first instance judgment’) was delivered on Tuesday 15th September 2020.
That judgment is uploaded on our website here. It is complex, runs to over 150 pages and deals with many issues. The FCA website contains further information about the judgment, together with links to the judgment itself and a summary prepared by the solicitors that the FCA instructed in the case. This can be found at https://www.fca.org.uk/news/press-releases/result-fca-business-interruption-test-case. You may also wish to consider subscribing for email updates from the FCA, which can be done from the FCA’s Business Interruption webpage at https://www.fca.org.uk/firms/business-interruption-insurance. There is information as to how the Financial Ombudsman is approaching business interruption insurance cases at https://www.financial-ombudsman.org.uk/businesses/complaints-deal/coronavirus-covid-19-information-businesses.
New India is still reviewing the test case judgment for any potential impact that it will have on claims made and any decision that may already have been made in it. We are also awaiting further information about whether any of the parties to the test case intend to appeal.
Potential to Appeal
Please note that the parties will now have time to consider the judgment and determine whether they would like to appeal it in part or in whole.
Any applications to appeal the decision will be heard at a further ‘consequentials’ hearing before the High Court scheduled for 2nd October 2020. The FCA and the Insurers have agreed that they will seek to have any appeal heard on an expedited basis, given the importance of the matter for so many policyholders and that consideration will be given to the possibility of a ‘leapfrog’ appeal to the Supreme Court (as opposed to any appeal going first to the Court of Appeal). If this happens, it is likely to speed up the process considerably.
According to the FCA’s Guidance, we are required to promptly assess all outstanding claims and reassess all rejected claims and complaints following the final resolution of the test case. The ‘final resolution’ of the test case occurs when the Court has determined the questions in the test case after all rights of appeal have been concluded.
As at the date of this update, it is unknown whether the parties will appeal the first instance judgment. Therefore, at this stage the first instance judgment cannot be considered as the ‘final resolution’ of the test case. If there is no appeal, we will reassess our decision and apply the first instance judgment to claims made in accordance with the FCA Guidance.
We have sent individual letters to all policy holders on 22nd Sep 2020 and will update again once we know the status of any appeal, in particular to inform policy holders whether we are required to make a final decision on Potentially Affected claims.
Dated: 22nd September 2020