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Euro review could bring early respite on PI rules

A review of the crippling European Union professional indemnity insurance requirements for IFAs is under way and is scheduled to be completed by April 2005.

As things stand, the insurance mediation directive, requiring firms to have £1m in professional indemnity cover, comes into effect in January 2005, to be followed in April 2006 by the market in financial instruments directive, requiring firms to have £500,000 extra cover, set aside £30,000 capital or have a combination of the two in place.

However, Money Marketing has learned there is a requirement in Mifid for the European Commission to review the PI requirements under both directives by April 2005 at the latest, with a possible scenario of a conclusion before the end of the year.

It is hoped that the review could lead to more flexible and reduced requirements for intermediaries, including an ability for regulators to grant waivers as well as a trade-off between PI and capital adequacy.

Aifa says it is preparing its case for when the EC asks for submissions.

Aifa director of policy Fay Goddard says: “The European Commission has to review PI requirements by April 2005 at the latest, so it may come to its conclusions earlier. The best-case scenario would be if it concluded its review before the IMD kicks in.”

Park Row Group head of business development Jo Smith says: “Anything which gives us some consistency in the treatment of professional indemnity cover and flexibility in how it is adopted has to be a good thing.”


MPs hold debate on housing market renewal

MPs will hold an adjournment debate on Thursday on housing market renewal. The debate has been called for by Labour MP David Wright and will be held in Westminster Hall ahead of Whitsun recess.

Nationwide says it will consider equity release

Nationwide Building Society has tempered its hands-off approach to the equity-release market, saying it will consider it in the future when it sees how the market develops. The society has not been shy to voice its concerns about equity release, saying the product could become the next misselling scandal. But speaking to Money Marketing, chief […]

High repurchases hit fund sales

Net Isa sales rose in April from the previous month but overall retail fund business slumped by a third from April last year as repurchases continued at high levels, says the IMA. The IMA&#39s monthly statistics reveal that retail fund sales fell to £702m from £1bn in April 2003 and from £853m in March this […]

FSCS announces Interim Chief Executive

The Financial Services Compensation Scheme has announced the appointment of Ron Devlin, OBE, as interim chief executive, following the departure of Suzanne McCarthy at the end of May. Devlin joined the FSCS in February 2001 as a senior adviser providing advice and support to the investment claims teams and undertaking projects for the chief executive. […]

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Preparing for the changes to the pensions market

As more and more providers start to reveal their stance on the charge cap and removal of commission and active member discount pricing, we thought it would be worthwhile to look at what these are, and the steps businesses should be taking to prepare for this.


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