Is there a need for tighter regulation of the industry?
What really has to be looked at is the policy wordings that these insurance companies have.
Are you going to set higher standards?
The wordings need to be looked at to ensure that the intentions the parties have is clearly reflected in these policy wordings. The insurance companies are arguing that it was never their intention to cover pandemics but when you look at some of the wordings, pandemics are not explicitly excluded.
Will you be monitoring more closely the use of fine print or unfair proof of claims to avoid paying out?
Yes, fine print and unfair burden of proof are some of the aspects of this business-interruption cover that have to be clarified. We have seen where some of the requirements imposed on policy holders to prove their claims have been very unfair.
Is there a new willingness by the Financial Sector Conduct Authority (FSCA) to get involved on grounds of what is fair and not just what is legal?
It's not our intention to change the policy wordings that have been agreed with a policy holder. But where the wording is unfair to a policy holder the FSCA under the Financial Sector Regulation Act has a mandate to look at the fair treatment of policy holders. This is something the FSCA will be looking at going forward.
Could the FSCA have done more in the past to protect policy holders from unfair practices?
I think the FSCA has done well. But we have reviewed our legislation, particularly in the insurance space, where we have come up with new policy holder protection rules and regulations.
Meanwhile you've instructed insurers to pay up?
Yes.
What if they ignore you?
We have got powers under the Act to direct them to pay.
What if they ignore you?
They can't ignore a directive. They have to comply with it or challenge it before a tribunal established under the act. If the tribunal rules against the insurer the decision can be taken to the high court on review.
So no speedy resolution for businesses under financial pressure now?
No. Hence we've said we will explore alternatives to ensure that policy holders who have suffered huge financial losses are not continuing to be under financial pressure.
Is there any incentive for them to resolve these claims swiftly?
Yes. The longer this issue drags on the bigger the reputational damage. That is enough incentive for them to address these claims as quickly as possible.
Aren't claims against them automatically cancelled if the business is forced to close?
There is a clause to that effect in the policy contracts.
So all they have to do is delay?
If there is any insurer out there that is adopting that strategy, it will not work. If they're seen as not engaging with a policy holder in good faith, I don't think the law can allow them to raise that defence to avoid paying a claim because the business no longer exists. That is something we will not allow.
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