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Cover help and threats as FSA fails to communicate

The FSA is sending out 1,200 letters to IFA firms that it has identified as having legitimate difficulties in getting prof- essional indemnity cover, promising to work on a one-on-one basis with them to find compliant insurance.

But despite the move, IFAs claim they are still receiving conflicting signals from the regulator.

One firm, Philip Evans & Associates, received the letter from director of the investment firms division David Kenmir, detailing the regulator&#39s new softer approach.

But a subsequent letter from the firm&#39s immediate FSA supervisor warned that it would be suspended if it did not sort out its PI cover within seven days.

The firm says it is angry that the regulator says in public and in letters it is making steps to assist firms but is still threatening to suspend firms before it takes those steps.

The Kenmir letter says the FSA is looking at the problems and how they may be resolved, the availability and price of cover, the activities of PI brokers and whether there are any alternatives to high-priced cover.

Philip Evans & Associates principal Philip Evans says he received the Kenmir letter dated October 4 but four days later received a second letter dated October 8, threatening suspension by October 15 if cover was not arranged.

Evans says: “Obviously they are not sitting down and communicating with each other. The joke about it is that although we have kept the FSA fully informed along the way they have not been doing the same.”

FSA spokesman Rob McIvor says: “We will not tolerate people who are not willing rather than not able to get cover.”


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