Adviser trade body Pimfa says insurance companies need more time to establish offer terms reflecting the new Financial Ombudsman Service compensation limit.
The new £350,000 ceiling on compensation claims comes into play in less than a week.
Pimfa says advice firms cannot be expected to have PI insurance confirmed and the FCA should postpone the implementation of the levy raise.
The body says: “The impact on the PII market was an area of key concern flagged by Pimfa; we are disappointed that in setting an implementation date of 1 April the FCA has failed to properly assess the impact on insurance companies and their ability to offer terms reflecting the changes in the compensation limit.”
Pimfa adds it has been assessing the impact of the new limit on its member firms which are currently looking to renew PI insurance.
It says: “The FCA must immediately postpone the implementation of the rules and revisit the impact of the increase in the compensation limit.”
Pimfa’s calls for the FCA to rethink its plans follow those of fellow adviser trade body, Libertatem.
The group put together a “steering committee” of industry professionals last week and has confirmed a meeting with the FOS.
It will also look to meet with the FCA and the Treasury to get a fuller picture of the affects of the £200,000 increase.