Advisers looking to passport into Europe under Mifid need to act quickly to ensure they get the correct professional indemnity insurance requirements, says PYV.
The specialist insurance broker says due to the current soft market conditions and the November implementation date for the European Union directive, advisers should already have in mind how they will comply with the more rigorous requirements for professional indemnity requirements.
Firms will need a 50 per cent increase in the current Insurance Mediation Directive minimum professional indemnity cover limit or can alternatively increase capital adequacy.
PYV says that companies which handle client money will also have to comply with the requirements although they are likely to hold enough capital to trade off the need for extra professional indemnity insurance.
Current projections suggest that only a small number of advisers will initially take advantage of the new passport freedoms but PYV says those advisers that do should be looking for appropriate cover as new 12-month contracts will take them over the November 2007 threshold.
PYV chief executive Neil Pointon says: “Any firm considering holding client money or applying to be able to passport into Europe, come November this year, should contact their PI broker now to discuss coverage and cost implications.
“Due to the current soft market conditions, in certain cases, it may now be possible to increase the present minimum limit of indemnity by the necessary 50 per cent for a relatively modest additional premium which IFAs may find better value than choosing the capital adequacy route or leaving it closer to the time.”