FCA Test Case

In June 2020, the Financial Conduct Authority (FCA) began legal proceedings in the High Court aimed at resolving the contractual uncertainty around the validity of many business interruption claims. This litigation is known as the “FCA test case.”

The FCA selected a sample of policy wordings from eight insurers to participate in the test case. Travelers Insurance Company Limited (Travelers) was not one of these insurers and was not a defendant in the test case.

After reviewing 21 representative sample policy wordings, the High Court provided its judgment in the FCA test case on 15 September 2020. You can read the judgment here. Six of the defendant insurers in the test case have since applied to the Supreme Court for leave to appeal.

In accordance with the FCA’s guidance to insurers, Travelers has reviewed relevant business interruption policies and informed policyholders, including those who have made a claim or complaint, of the outcome of that review and any impact on their claims or complaints.

Once the Supreme Court hands down a final resolution of the FCA test case, Travelers will determine if there is any impact to previously communicated or pending claims and will then inform policyholders directly or through their brokers.

October 2020