The British Financial Conduct Authority has made several pronouncements on the economic emergency that the global pandemic is causing and its expectations of firms during this 'black swan' event. Operational resilience, access to cash, unsecured debt products and insurance are all part of the picture.

SM&CR responsibilities

The FCA does not require any firm to put a single senior manager in charge of its response to the Coronavirus. Existing responsibilities are specified in the Senior Managers' Regime (SMR), for example SMF24 for operational resilience and SMF2 for financial resilience.

The FCA says that firms should pay particular attention to its statement about Key Workers in Financial Services of (20 March) and recommends that the SMF1 (or another most relevant member of the senior management team), should be responsible for each firm’s approach to its key workers.

Regulatory change

The FCA is reviewing its work plans so that it can delay or postpone activity which is not crucial to protecting consumers from sharp practice and guaranteeing market integrity in the short-term. This will allow firms to concentrate on supporting their customers during this difficult period.

The FCA has delayed several regulatory initiatives and has also scaled back its programme of routine business interactions, so that it will only contact firms on business-critical requests and responses to the Coronavirus and related matters.

It will continue with a small number of regulatory changes which support consumers, particularly the most vulnerable, or the absence of which would disrupt major long-term efforts.

The effects of the emergency on consumers

The FCA rules already give firms leeway in several areas and the FCA expects them to use this leeway to help consumers, bearing in mind the circumstances of each one.

The FCA says that it welcomes firms taking initiatives and going beyond usual business practices to 'support' their customers, especially relating to access to cash. When doing so, firms should notify the FCA, which might offer support.

The FCA still expects firms to deal with complaints promptly. However, wherever the pandemic prevents this they should contact it. They should aim to resolve any complaint within 8 weeks (15 days for payments firms). If they cannot, they should write to their customers and explain why they missed the deadlines.

Insurance products

On 19 March, the FCA published an update about its expectations of general insurance firms during the pandemic. This applies to insurers, brokers and others involved in the service supply chain.

Travel insurance

The FCA likes firms to make consumers aware of the scope of their cover and any exemptions that may exist. Consumers should also be able to find this information expressed on firms’ websites in a clear, concise way and should have access to call centres.

Health insurance

The FCA also expects each firm to be clear about any restrictions it might place on a time period when a consumer takes out a new policy. It might, for example, ban a policy from pay out within 12 or 18 months of the time when the policyholder takes it out.

Mortgages

On 20 March the FCA published new guidance for mortgage lenders, mortgage administrators, home purchase providers and home purchase administrators. Mortgages represent many consumers’ major financial commitment. The FCA is encouraging and facilitating the granting of flexibility on mortgage payments as a way of protecting consumers.