View more on these topics

Growing fears that PI rises could cut self-cert market

Rising professional indemnity insurance costs could result in the self-cert mortgage market shrinking, warns Active Management Group joint chief executive Mike Buckley.

Buckley says PI rates are already showing signs of hardening as insurers get nervous over fears that some brokers are inflating borrowers’ incomes to get bigger loans but things could get worse if further abuses are uncovered by the FSA.

The FSA is due to follow up investigations last year which found that not enough affordability or suitability checks were being undertaken by intermediaries on self-cert.

Buckley says: “PI insurers are concerned and it will put people off self-cert if PI rates start to harden. We think it is quite serious and it is on the horizon.

“The problems with self-cert are driven by the regulator because there is concern. If there is an issue in the future and there are claims, then there will be claims against PI policies and they will want brokers to lower their risk and not do self-cert.”

Collegiate managing director Tony Howe says underwriters are already starting to increase PI cover prices.

Howe says: “PI premiums will go up if there is a risk. People writing that sort of business will pay more as there will be always be focus areas for insurers. The process has started and if there are claims, then you can expect to see more.”

Recommended

Pioneer to use Exweb as e-commerce partner for IP

The Exchange has confirmed that Pioneer Friendly Society will be using the Exweb portal service as its first online e-commerce partner. Exweb’s 23,500 users will now be able to perform client specific comparisons for the provider’s income protection products.Pioneer’s ‘Pure Protection’ IP policy includes day 1 cover, no loading for occupation or gender, no penalties […]

Standard sets art challenge for advisers

Standard Life is offering advisers the chance to commission their own piece of art from a budding young artist. The firm is sponsoring BraveArt 06, a showcase for Scottish student artists to be held at the Atlantis Gallery, Brick Lane, London, on September 21-24. The winning entrant, chosen at random, will be given 1,500 to […]

Mortgage chasers to escape regulation

Claim-chasers in the mortgage market could be exempt from regulation once the Compensation Act comes into force. The Department for Constitutional Affairs’ head of claim regulation Mark Boleat admits that a loophole may exist for firms whose claims are not based on the sale of a product. At present, legislation will only apply to those […]

Nationwide tipped to flourish after merger

The Building Societies’ Association has trumpeted the merger of Nationwide and Portman as an opportunity for a mutual to give the banks a run for their money.The BSA claims its members do not get the same grief as banks for treating customers unfairly and it is healthier to have strong building societies in the mortgage […]

Help, I’ve been appointed as a trustee. What are my responsibilities?

Graeme Robb, Technical Manager at Prudential looks at the key duties and responsibilities of a trustee.  This article will consider the following: Duties to be performed on appointment Investment duties Protecting the interests of beneficiaries Keeping accounts and records Distributing property to beneficiaries Duties to be performed on appointment Obtain a copy of the trust […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com