FS20/5: Coronavirus and customers in temporary financial difficulty: guidance for insurance and premium finance firms

On 1 May 2020 we published draft guidance for insurance and premium finance firms on the fair treatment of customers in temporary financial difficulty as a result of coronavirus (Covid-19). This document summarises the feedback we received on our proposed measures and our response.

Read FS20/5

We wanted to act quickly to protect consumers in these difficult times. The draft guidance was therefore subject to a short consultation period, which closed on 5 May. We received 59 responses from interested stakeholders, including firms, trade bodies, consumer groups and individuals.

We are now publishing our finalised rules and guidance, subject to a small number of changes. These include amendments to:

  • clarify that firms don’t have to consider an interest rate revision as a prerequisite to offering a payment deferral
  • provide flexibility for firms to offer a payment deferral period of between 1 and 3 months
  • clarify how the guidance applies to different types of insurance contract and customer

Who this affects

The rules and guidance affect a range of firms including:

  • insurers
  • insurance intermediaries (including appointed representatives)
  • premium finance lenders that provide credit to fund the payment of insurance premiums in instalments
  • premium finance brokers that carry on regulated activities relating to credit granted for the purposes of financing insurance premiums in instalments
  • debt collectors 
  • other firms that may be involved in insurance arrangements and/or in relation to the provision of premium finance

Actions and next steps

The guidance and rules come into effect on Monday 18 May 2020.

We will review the guidance within 3 months of it coming into effect in light of developments around coronavirus to assess whether it is still needed.