The Financial Sector Conduct Authority (“FSCA”) formalised its concern initially in the Communication 34 of 2020 (“Communication”) which was drafted due to complaints from policyholders about delays and reputations by insurers when processing BI claims.
The FSCA considered different BI wordings and found that there were broadly 6 categories, noted in the Communication.
Based on the information received and analysed by the FSCA to date, the FSCA found that, although it could not find evidence that the National Lockdown could be a trigger for a valid BI insurance cover claim, the Lockdown cannot be used by any insurer as a ground to reject a claim. Especially where a policyholder has a BI policy with a radius clause and the PH can prove that it suffered a loss within the radius of the business.
The FSCA advised that it may issue specific directives to any insurer which is seen to be non – compliant.
The FSCA confirmed that the judgment in the matter between Café Chameleon CC v Guardrisk, is in line with the FSCA Communication.
Be safe and always treat your customers fairly.
Fathima Khan-Ahmod
Ahmod Consulting (Pty) Ltd
Here is the link to the initial FSCA Communication 34 of 2020 re: Business Interruption: https://www.fsca.co.za/Regulatory%20Frameworks/Temp/FSCA%20Communication%2034%20of%202020%20(INS).pdf
Ahmod Consulting 