The Council of Financial Regulators has called on insurers to move as quickly as possible to resolve uncertainty around business interruption cover and to make payments on claims where policies respond.

“The council has been closely monitoring the progress of efforts to test the validity of pandemic exclusions in business interruption insurance policies,” a statement released last week says.

“The NSW Court of Appeal recently ruled in favour of policyholders on one key issue, though other areas of uncertainty remain.”

The council, comprising the Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission, Treasury and the Reserve Bank of Australia meets quarterly.

A statement following the latest meeting says they “encouraged the industry to work with the Australian Financial Complaints Authority (AFCA) and to move as quickly as possible to resolve any remaining uncertainty and promptly pay out valid claims.”

Council members also noted a number of insurers had increased potential claim provisions following the test case on the validity of exclusions citing the repealed Quarantine Act 1908 was brought by the Insurance Council of Australia with AFCA.

A decision is yet to be made on whether an appeal application will be lodged, while a further test case to consider other issues such as proximity and prevention of access clauses is also being discussed.