The coronavirus pandemic has left many people’s personal finances in tatters and now the Financial Conduct Authority (FCA) has proposed ways to protect at least some insurance clients from suffering further.
The City watchdog has 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 after 31 October 2020.
The proposals build on the guidance that has been in place since may and lays out how firms should provide tailored support to consumers who have already had a payment deferral and those newly in financial difficulty due to changed circumstances relating to coronavirus.
The proposed measures include re-assessing the risk profile of the consumer to see whether they could be offered lower monthly payments, considering whether other products can be offered which better meet the consumer’s needs, and providing help to avoid the need to cancel necessary cover.
Where customers hold premium finance credit regulated agreements, help could include allowing the customer to make no or reduced payments for a specified period, and allowing the customer a reasonable time and opportunity to repay the debt, including by deferment of payment of arrears. It also includes suspending, reducing, waiving or cancelling any further interest or charges.
Moreover, the regulator also asks firms to not proactively contact all consumers who miss payments. Though, they should still consider whether it’s appropriate to contact a customer to offer support if they have missed a payment. They should also consider what steps they should take where a customer could be vulnerable.
Industry stakeholders have until October 20 to comment on the proposals.
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