Coronavirus – insurance issues for UK businesses and insurers

Earlier this week we looked at the effect that Coronavirus may be having on events cancellation, travel and personal accident insurances.

However, businesses should now consult with their professional advisers and insurance managers over the extent of the wider insurance programme that they might have in place to cover other financial losses caused or contributed to by Coronavirus.

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SFO in the dock again as former Barclays’ executives cleared of Qatari fraud charges

On 28 February, former senior Barclays executives Roger Jenkins, Tom Kalaris, and Richard Boath were all acquitted of conspiracy to commit fraud contrary to section 1(1) of the Criminal Law Act 1997, and fraud by false misrepresentation, contrary to section 1 of the Fraud Act 2006.  The case is the latest in a series of high profile setbacks for the Serious Fraud Office (“SFO”), which failed to persuade a jury that the three had conspired with former chief executive John Varley and chief financial officer Chris Lucas to channel secret fees to Qatar in return for the Gulf state injecting £3.9 billion into Barclays in two cash calls in June and October 2008. The investment was credited with assisting the bank in avoiding the need for a UK government bailout in 2008, unlike two of its clearing bank rivals.

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Lloyd’s Syndicate to Insure Against Cryptocurrency Hacks

A group of underwriters, called Atrium (Lloyd’s syndicate for Coincover) have developed a £100,000 policy in response to a surge in reports of the hacking of cryptocurrency accounts.

According to Lloyd’s, the policy has a “dynamic limit” that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed assets even if this fluctuates over the policy period.

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Coronavirus Related Event Cancellations Creating Exposure for Insurers

Last week, the insurer Hiscox confirmed that it has begun to receive notifications of coronavirus related claims.

Hiscox has said that it is still too early for it to determine the potential impact of the virus on its business. However, it cites events cancellations, travel and personal accident cover as the main areas of its exposure. Hiscox added that it only covers insurance for a pandemic in a “very small part of the portfolio”. Continue Reading

FCA begins contacting pensions advice firms over suitability and value concerns

The retirement income market is a key area of FCA focus, particularly the suitability of both products and advice as the industry adapts to pension freedoms. In the FCA’s Sector View Report published on 18 February 2020, Pension freedoms are highlighted as one of the continuing key drivers of change in the sector with more consumers choosing to draw down and make more complex investment decisions. The report confirms that the FCA is proposing to introduce investment pathways designed to support non-advised consumers’ drawdown choices.

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Court of Appeal confirms that no special rules apply to regulators when it comes to documents protected by legal professional privilege

In a welcome and robust defence of the scope of legal professional privilege (LPP), the Court of Appeal in Sports Direct International Plc v Financial Reporting Council [2020] EWCA Civ 177,  reiterated last week that there are no exceptions to the protections afforded by LPP unless it is used to hide criminal actions or where a particular statute intends to modify the rule. This confirms that there is no authority for any general or wider principle that a regulator may be able to get around the usual rules on LPP and force disclosure of otherwise priviliged materials.

The Court of Appeal also reiterated that documents attached to emails protected by LPP will be disclosable if they themselves do not satisfy the well known criteria for LLP. The document cannot hide under the protection of the email.

Judge holding gavel in courtroom

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Industry setting its own standards – FCA backs code for unregulated activities

The FCA has backed standards penned by independent body, the Lending Standards Board (“LSB“),  that aim to ensure finance companies conduct themselves properly when they offer unregulated products.  This is despite some fears in the industry that FCA backed voluntary codes may confuse consumers.

FCA

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