COVID-19: Regulatory round-up

Industry bodies have provided information related to the coronavirus crisis as the insurance and financial services sector takes steps to comprehend the scale of the situation and adjust to the new challenges.

FCA

As part of its response issued yesterday The Financial Conduct Authority (FCA) said it is closely monitoring the situation while working closely with the government, Bank of England, the Payments Systems Regulatory and firms.

It said it is reviewing its plans to delay or postpone activity which is not critical to protecting consumers and the market in the short-term. One immediate action is to extend the closing date for responses to its open consultation papers and Calls for Input until October 2020, and it is scaling back its meetings and only contacting firms on ‘business-critical' requests and coronavirus-related responses.

The delayed consultations include:

1. CP20/4: Quarterly Consultation No 27
2. CP19/32: Building operational resilience: Impact tolerances for important business services
3. CP20/1: Introducing a Single Easy Access Rate for cash savings
4. CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations
5. CP20/5: Consultation paper on ETF Listing: Premium to Standard Listing

The delayed Calls for Input include:

1. Open Finance
2. Accessing and using wholesale data

Among the delayed publications - due before end of June - are Vulnerability Guidance and Research, options to change its framework in relation to Duty of Care Feedback Statement and a consultation paper on mortgage switching.

On health insurance, it said: "We also expect firms to make clear any time period restrictions when consumers take out a new policy, for example if a policy will not pay out from 12 or 18 months of taking out a new policy."

And for travel insurance: "We support firms making consumers aware of the scope of their cover and what exemptions there may be. Consumers should also be able to find this information on firms' websites in a clear, concise way and have access to call centres."

The FCA guidance on mortgages is: "Mortgages represent many consumers' major financial commitment. We have been encouraged by the actions of some lenders in granting flexibility on mortgage payments as a way of protecting consumers. We will be discussing with the industry and updating approaches mortgage providers may take to assisting their customers in the coming days."

ABI

The Association of British Insurers (ABI) has released a Coronavirus Q&A which offers a guide across multiple lines, including business insurance, travel insurance and income protection (IP).

The guidance covers key questions:

1. What products pay out when I cannot work due to illness?
2. Will insurance cover pay out if I self-isolate?

For IP it said: 

• Insurers will pay out under the terms of their contracts, but policyholders should be clear on the terms of their coverage. Self-isolation is only likely to be covered for those income protection policyholders where an individual has been advised to do so by a medical professional.
• For claims to be paid the policyholder needs to meet the definition of incapacity. Policies will vary and it is important to check with your insurer or adviser.
• Self-isolation which is not medically advised is unlikely to be covered unless symptoms are severe and continue beyond the waiting period.

CII

The Chartered Insurance Institute (CII) is postponing April written examination sittings that were due to take place on 20, 21 and 22 April until October.

The only exception to this postponement to sittings is RO6 (Financial planning practice) and AF7 (Pension transfers), which it is planning to hold sittings for in July.

It added it will be confirming these changes with each candidate in due course.

At the current time, in line with government guidance, multiple choice question online examinations will go ahead at the pre-booked centres as there are less than 25 candidates at each sitting.

The CII said it will continue to monitor and review the situation with these sittings, in line with government guidance.

IR35

The chief treasury secretary Steve Barclay has announced that the IR35 tax reforms will be pushed back until 6 April 2020.

He confirmed that the move is part of Treasury measures to protect the UK economy from the impact of coronavirus.

Chris Hickey, UK CEO at Robert Walters, said:  "Government's decision to postpone the implementation of the new off-payroll tax (IR35) rules to the private sector (in light of the recent COVID-19 outbreak) will be welcome by almost all employers, as many businesses will look to the contractor, temp and interim professional community during this period of upheaval.

"Accessibility to contractors will help plug any short-term skills gaps we may likely experience in the coming months, as well as ease pressure on industries experiencing a particularly high level of demand - such as e-commerce, telecommunications, healthcare & pharma, and supply chain.

"We anticipate a spike in contract/interim hiring, as companies look to hire professionals."

Yesterday the Chancellor announced £330bn of government backed loans to fight coronavirus