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LIA in plea for blanket waiver as PI insurers shun sector

The LIA is calling for the FSA to extend a blanket professional indemnity insurance waiver to all IFA firms with annual turnovers below £500,000 until it reaches a long-term solution to the PI crisis.

Head of public affairs John Ellis says that he has seen evidence from LIA members that PI insurers are not willing to offer any cover to firms unless their turnover is over £500,000.

He warns that unless the FSA takes action soon, a “fairly significant number of IFA firms will bite the dust”.

In the LIA&#39s response to CP169, in which the FSA published proposals to alleviate the PI situation, Ellis says it appears that in many cases the regulator is asking for firms to do the impossible and find cover when the onus should be on the FSA to prove that cover actually exists.

Ellis says: “There is evidence that PI insurers are not prepared to insure firms with half a million turnover or less. Instead of this business of everyone applying for a waiver individually, the FSA should extend a waiver to all of the firms in this category until it finds a long-term solution.”

FSA spokeswoman Louise Buckley says: “A general waiver would mean that IFAs would be less likely to be able to meet claims against them which is hardly going to protect consumers and would not be fair to those IFAs who have obtained cover.”

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