Professional indemnity insurance waivers for IFAs will end on Friday and the FSA is ready to crack down on firms which have failed to obtain adequate cover.
The introduction of the insurance mediation directive on January 14 requires IFAs to have 1m in PI cover and rules out the possibility of waivers, which were introduced by the FSA to help firms which were struggling to get cover but which had sufficient capital to meet claims themselves.
As many as 300 IFA firms are believed to have had waivers in place for PI at some point. The biggest firm to have had a PI waiver is the Falcon Group, which found compliant PI insurance from December 1, 2004.
FSA spokesman Robin Gordon Walker says: “Waivers do not go on after the 14th and we are clearly not able to change these requirements. There is a directive coming into force which requires intermediaries to hold PI insurance. If firms have not got PI cover then they are non-compliant. Those who have not got cover should be seeking it now.”
Personal Finance Society public affairs director John Ellis says: “My impression is that the FSA wants to get the PI system working properly and so they will not be moving in too quickly to enforce the IMD.”
Brian Steeples has become the first president of the Personal Finance Society and is determined in the inaugural year to show that the industry now has a new voice