Coronavirus and customers in temporary financial difficulty: draft updated guidance for insurance and premium finance firms

These proposals extend a series of temporary measures to help customers who hold insurance and premium finance products and who are in temporary financial difficulty because of coronavirus (Covid-19).

Read the draft updated guidance (PDF)

The original measures came into force on Monday 18 May 2020 and we committed to reviewing them after 3 months.

We now propose extending the guidance for a further 3 months, until 31 October 2020 although certain, specific parts will continue beyond that date. We are also proposing to set out more clearly our expectations on how firms should treat customers still in financial difficulty at the end of a payment deferral.

We are taking this opportunity to:

Why we are proposing to extend the measures in the guidance

There are still customers in temporary financial difficulty directly as a result of coronavirus and the wider economic impact it has had. We think it is important that we renew this guidance now so that firms continue to treat these customers fairly.  

Who this applies to

This guidance applies to regulated firms operating in the insurance and premium finance markets. This includes:   

  • 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 the provision of premium finance


The draft updated guidance sets out our expectations for firms when considering the fair treatment of existing customers in financial difficulty, due to circumstances arising from coronavirus. The aim of the guidance is to prompt firms to help customers, where possible, to:    

  • reduce the impact of temporary financial distress
  • ensure they have insurance that meets their demands and needs

Feedback we are seeking

We want to act quickly to protect consumers in these difficult times. We consider that the delay involved in publishing a formal consultation accompanied by a cost benefit analysis would be prejudicial to the interests of consumers. We are therefore not doing so. This is not a statutory consultation. There is no statutory requirement to prepare a cost benefit analysis for guidance.

However, we welcome comments on our proposal to extend the guidance for a further 3 months, until 31 October 2020 with certain parts continuing beyond that date, and on the related draft instrument.

We would also like to take this opportunity to seek views on retaining aspects of the guidance on a permanent basis and invite stakeholders to provide input in anticipation of the review we are intending to carry out of our product value and coronavirus: guidance for insurance firms later this year:

  1. Do you think the sections of the draft updated guidance that set out expectations for how insurance distributors should consider supporting customers in financial difficulty (excluding the expectation to grant payment deferrals and review interest rates) should be made permanent and applied to any situation in which customers are in financial difficulty, including those unrelated to coronavirus?
  2. Do you have any feedback on our product value and coronavirus: guidance for insurance firms to help inform our review of the guidance, which we indicated that we intend to carry out within 6 months of its publication?

Our approach on both of these questions will involve further engagement with stakeholders and this will not be the only opportunity to register views. However, we feel that there is value in hearing from stakeholders at this stage. 

How to respond

We welcome comments by 5pm on Tuesday 28 July 2020

Please send your comments to: [email protected] and [email protected]

Next steps

If confirmed, the updated guidance will come into force by 18 August 2020.