Consultation paper planned, as IFAs struggle for cover
The FSA has vowed to try to solve the problems of professional indemnity (PI) insurance following the chaos of the recent IFA PI renewal season.
The FSA will release a consultation paper on PI insurance, after many professions struggled to get cover at renewal this year.
The consultation is likely to take place in the new year.
The PI market has shrunk significantly over the past year, particularly for independent financial advisers (IFAs).
Wordings have been tightened and schemes closed to new business.
IFAs complained they were unable to get enough cover to comply with FSA regulations during their traditional November renewal period.
FSA investment firms division director David Kenmir recently aroused the ire of brokers and IFAs when he claimed that IFA PI rates had risen on average 50%, with cover available to almost all IFAs.
"I suspect a huge number, if not all, cases underwritten in the last few weeks, have compliance problems and an even bigger number of cases have no insurance at all," one specialist PI broker said.
Now the FSA has revealed that it will issue a consultation paper next year on the PI market, in response to current problems with cover.
Kenmir's department will oversee the paper.
No date has yet been set for its release.
An FSA spokesman said the figures quoted by Kenmir were current at the time.
"We're happy to reassess the situation as it comes closer," he said.
Tomorrow, the Association of Independent Financial Advisors (AIFA) will finalise its survey on its members' renewals.
AIFA policy and technical services director Fay Goddard said: "So far, many have been offered terms by their insurers, but a significant amount are showing no cover or more commonly, non-compliant cover."