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Advisers must account for CI rebroking to get PI renewed

Professional indemnity insurers are turning their attention to critical-illness insurance rebroking, telling IFAs they will have to account for any of this business before they see their coverage renewed.

Speaking at the Money Marketing Fair Deal for IFAs round table, Direct Life & Pensions sales and marketing director Richard Verdin said his firm was told by their PI broker that they would have to disclose any critical illness rebroking they have been involved in before their PI would be renewed next year.

Verdin said this is not an issue for DL&P as it has not done any rebroking of CI but it will be for many firms.

He said with the onset of regulation in January, PI insurers will be much more wary of offering coverage to firms which have done significant amounts of rebroking protection business.

The issues include whether the second policy covers as many conditions as the first and whether its premiums are more expensive and available on a guaranteed basis.

Reputable protection intermediaries have been aware of potential issues surrounding rebroking for some time, according to Verdin, who said PI insurers are starting to take notice.

He stressed that it is not the initial CI sale which is at issue but only rebroking that PI insurers will be concerned about.

PI brokers have confirmed that they do have concerns about critical-illness insurance in advance of the onset of regulation of protection from next January.

Verdin said: “PI insurers are going to be demanding disclosure on to what extent rebroking of CI has occurred before setting renewal premiums.”

“As an industry, we have been talking about the appropriateness of replacing one CI policy with another for some time – it appears that the PI insurers have caught up.”


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