The UK’s Financial Conduct Authority (FCA) plans to extend temporary measures to help consumers who are struggling to pay their insurance premiums amid the coronavirus pandemic.
The financial services watchdog is consulting on whether to extend the offer of payment deferrals for customers of insurance companies until the end of October.
The rules first came into force on May 18 for three months in response to policyholders losing their jobs or falling ill during the government-imposed lockdown.
The FCA instructed insurers to reassess the risk profile of customers, noting these may have changed because of the coronavirus impact and which may allow firms to offer products with “materially lower” premiums.
The measures require insurers, and lenders offering financing for insurance premiums, to switch their customers to products that are better suited to them during the Covid-19 crisis.
Insurers and lenders can also cut the cost of premiums or offer rebates in cases where the cover no longer functions as intended or additional services can no longer be provided.
The watchdog further urged businesses to continue to consider payment deferrals of up to three months if amendments to cover did not ease the financial burden for struggling customers, unless it is not in the customer’s interest to do so.
The original measures are due to end in August but now the FCA is seeking comments by close of day on Tuesday 28 July on its proposal to extend this guidance until 31 October 2020.
“It is important that customers don’t leave themselves uninsured, and that their insurance cover meets their demands and needs,” the FCA said in a statement.
“Those struggling to afford their insurance or premium finance payments because of the impact of coronavirus should contact their insurer or insurance broker to discuss their options.”