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Law360, London (May 15, 2020, 12:05 PM BST) -- The main trade association for British insurers has said the industry is taking wide-ranging action to support customers facing financial difficulty because of the COVID-19 outbreak in response to a call from the finance watchdog.
Insurers are offering flexible policies on home and car insurance to help people who need to work from home and to help key workers who need to travel to work, the Association of British Insurers said Thursday.
The Financial Conduct Authority announced new measures Thursday to encourage lenders and insurers to help out customers struggling to repay loans and premiums during the coronavirus crisis, which has killed almost 300,000 people around the world.
The watchdog's rules, which will take effect on May 18 and remain in force for three months, will require insurers and lenders to consider measures such as allowing customers to switch to products that are better suited to the crisis.
"As the FCA has recognized, since the start of the pandemic, insurers have taken wide-ranging action to support customers who may be facing financial difficulty," a spokesperson for the association said. It has set up "industry-wide pledges" in areas including motor, travel and business interruption insurance to help customers.
The industry's response to claims for business interruption has come under scrutiny.
The ABI conceded on Thursday that most businesses will not have valid cover for the pandemic. And the FCA is planning to take insurers to court over their interpretation of policies for business interruption.
But the association also said Thursday that insurers have promised to support customers as they make claims for business interruption connected to the outbreak and will pay any valid claims as soon as possible to help businesses struggling with cash flow.
Insurers in Ireland have also been told by regulators to offer flexibility to customers. German insurance giant Allianz said last month that it will hand back €9 million ($9.7 million) to its Irish car insurance customers to reflect the drop in traffic amid the COVID-19 lockdown.
--Additional reporting by Martin Croucher. Editing by Ed Harris.
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