FSA research finds current PI requirements 'fit for purpose' - Professional Indemnity Insurance for IFAs

5/06/2008

The Financial Services Authority (FSA) no longer views Professional Indemnity (PI) insurance cover as a fallback option for firms which are wilfully negligent, it has been claimed.

IFAonline reports the assertion, which is made by the Association of Independent Financial Advisers (AIFA) in light of the FSA's most recent feedback on the Review of Prudential Requirements for Personal Investment Firms.

AIFA previously asserted that the FSA believed some advisers might act negligently knowing that their PI cover would protect against any claims.

But Chris Cummings, AIFA director general, tells IFAonline: "The FSA's research found no evidence that the current PI insurance requirements for IFA firms are not fit for purpose."

He adds that this extends to there being no support for a move from providing cover on a "claims made" basis to a "business written" approach.

Mr Cummings tells the resource that the FSA no longer believes that the protection of PI could result in more poor advice being given "deliberately or otherwise".

IFAonline previously reported that the FSA was considering ways of increasing the linking of PI premiums directly to the perceived risk of mis-selling associated with a particular IFA.


PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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