PI scrutiny 'could intensify' with Financial Services Bill - Professional Indemnity Insurance for FSA regulated firms

16/02/2010

Written by Neil Pointon

The government's Financial Services Bill could see professionals in the sector come under closer scrutiny from Professional Indemnity (PI) insurers, it has been suggested.

Writing for The Lawyer, Martin Langley and Dan Preddy predict that insurers providing PI, Directors' and Officers' and similar insurances to financial institutions could intensify their monitoring of those organisations' practices.

Under the terms of the proposed Bill, shareholders and financial firms' institutional clients could be able to bring collective proceedings - and not just consumers.

"The potential targets of such proceedings are equally broad, including any Financial Services Authority-authorised person in respect of services provided in connection with a regulated activity," the article's authors write.

As a result, PI providers are expected to focus more closely on any such professionals - including insurance brokers and financial advisers alongside banks, investment managers and other such individuals.

The Financial Services Bill aims to tackle risk on a widespread basis, with a Council for Financial Stability due to be created in order to assess risks on a national and international footing.

© 2010 Adfero Ltd.

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