FSA outlines PII rules for IFAs

The FSA today held its first personal indemnity insurance (PII) forum, aimed at helping brokers understand its complex PII requirements.

Following the meeting the FSA published consultation paper CP193: Professional Indemnity Insurance for personal investment firms, which laid out its proposals for PII rules for IFAs.

The key proposals included:

Firms given the opportunity to combine PII policies with their financial resources so that they maintain adequate resources overall.

Setting out the essential elements of PII policies for IFAs but without specifying standard policy wording.

Enabling firms to comply with the Insurance Mediation Directive.

FSA director David Kenmir said: "We want to improve communication between the PII market, trade bodies and the FSA. This will help us all to resolve the problems IFAs are experiencing. We have invited the PI industry, and trade bodies, to participate in a working group which will tackle the issues in the OFT's recent report.

"The group will consider how the PII broking business can be made more transparent and will help insurers understand the issues they should be looking into when assessing IFAs."