When a claim is submitted under a shop insurance policy, what must the insurer do to comply with FCA claims-handling rules during the claim processing period?

In the context of the FCA (Financial Conduct Authority) claims-handling rules, the requirement for insurers to notify the policyholder of progress during the claim processing period is fundamental. This rule is designed to ensure transparency in communication between the insurer and the policyholder, allowing the customer to remain informed about the status of their claim.

Keeping the policyholder updated on the progress helps to manage expectations and can alleviate some of the stress associated with the claims process. It demonstrates good customer service and builds trust, which is an essential aspect of the insurer's obligations under the FCA guidelines. Regular communication is not just a best practice; it is a regulatory expectation, ensuring that policyholders are not left in the dark about the outcome of their claims.

Other options may seem beneficial but do not specifically address the requisite actions outlined in FCA regulations for claims communication. For example, making an interim payment, while possibly part of an insurer's best practices, is not mandated in every claim. Similarly, providing details of the Financial Ombudsman Service or sending policyholder details to the Financial Services Compensation Scheme may be relevant in specific situations but are not general requirements tied to the processing of each claim. Thus, notifying the policyholder of progress stands out as a necessary compliance step during the claims