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Insurers and FCA seek clarity on business-interruption ruling
RSA Insurance Group plc and other insurers will try to take a dispute over Covid-19 payouts directly to the United Kingdom Supreme Court if they can't reach a deal with regulators.
Several insurance firms and UK regulators filed applications to "leapfrog" the case to the Supreme Court. The UK's Financial Conduct Authority (FCA) said it's working closely with the eight insurers that participated in the test case to reach an agreement on a range of issues so the appeal wouldn't be required.
A trial court judge issued a ruling earlier this month in the fight over the effect of Covid-19 on small businesses that gave both regulators and the insurers something to be happy about. While the court said the insurers should pay for some business-interruption claims linked to the virus, the total liability was less than feared.
"The FCA's intention has, throughout the process, been to achieve clarity on affected BI policies at speed," the regulator said on Tuesday, in reference to business interruption. "We believe that clarity was provided in the initial judgment handed down on Sept 15."
The FCA said its "leapfrog" application was filed on a precautionary basis in the event that an agreement isn't reached with insurers by Wednesday. The regulator added that it understands seven insurer parties have made similar precautionary applications.
The London case is one of thousands of legal battles around the world centered on business-interruption policies that insurers contend don't cover pandemics.
In the United States, New York retailer Century 21 Stores sued several of its insurance providers over the failure to pay about US$175 million in claims, money the chain insists could have helped it avoid bankruptcy. In France, AXA SA agreed to cover losses sustained by several hundred restaurants after losing a court case brought by one owner.
In a separate statement, RSA said it would also seek permission to appeal the High Court's findings to the Supreme Court. The insurer said a hearing in relation to the application will take place on Oct 2. BLOOMBERG