This article was written by Ciara Davies.
The guidance covers the actions firms can take when they identify a customer in financial difficulties due to COVID-19. It also outlines when the FCA would expect a firm to grant a payment deferral and the FCA’s expectations regarding premium finance firms reviewing any interest rates associated with premium instalments.
The FCA has also published a feedback statement that summarises the feedback it received on the measures it proposed in its draft guidance issued on 1 May 2020. Some amendments have been made to the draft guidance to reflect the feedback received, including:
- a clarification that firms do not have to consider an interest rate revision as a prerequisite to offering a payment referral.
- provision for firms to give flexibility to offer a payment deferral period of between one and three months.
- a clarification as to how the guidance applies to different types of insurance contract.
The FCA also published the COVID-19 Premium Finance Instrument 2020, amended to reflect the new guidance. This will come into force on 18 May 2020.