On 12 August 2020 the Financial Sector Conduct Authority ("the FSCA") published a Press Release entitled "Update on contingent business interruption insurance cover" ("the Press Release") in terms of which the FSCA provides an update on the recent steps it has taken in respect of contingent business interruption cover ("CBI cover"). The Press Release can be accessed here.
The Press Release specifically provides an update on:
- obtaining legal certainty in respect of CBI cover;
- the application of time-barring clauses in policies; and
- interim payment offers.
The FSCA iterates that CBI cover is a complex issue and that in order to obtain the necessary legal certainty the FSCA is of the view that a court will need to be approached. In this respect the FSCA has reached out to the non-life insurance industry to commence discussions on the most efficient manner through which to ventilate the issues in dispute. Click here to read more on the FSCA's proposed way forward.
The Press Release states that while it was previously agreed and communicated in a press release dated 24 July 2020 that non-life insurers would waive the time-barring clauses in their policies, subsequent consultations have revealed that due to reinsurance requirements this may not be possible in every instance. The FSCA encourages policyholders and brokers to consider the time-barring clauses in their policies and to engage with non-life insurers to determine if any indulgence may be granted.
In respect of interim payment offers, the Press Release provides that in addition to those non-life insurers with which an agreement was reached in respect of the offering of interim relief, many additional non-life insurers have announced that they are similarly making interim payment offers to certain policyholders.
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