Claims against Rockingham Retirement’s advice arm will not be covered by PI insurance after it emerged cover could not be renewed following an FSA visit in 2010 which led it to stop offering advice.
As PI policies cover claims that arise during the insured period rather than business written during the period, claims against the firm since August 2010 will not be covered. A letter from Rockingham managing director Steve Hunt to investors, seen by Money Marketing, says Eureko withdrew PI cover in August 2010 when it came to be renewed.
An FSA visit to Rockingham in June 2010 led to Rockingham suspending its advice arm in July. There is no suggestion that Rockingham traded without appropriate PI cover and its direct arm continued to have cover.
In the letter, Hunt says: “At the subsequent renewal, the cover lapsed without any investors being eligible for cover and we have been advised after taking legal opinion that no claims will now be accepted by the insurer.”
Hunt says Rockingham has “fought long and hard” that cover should be in place based on when the business was sold. In September, Rockingham was fined £35,000 for unsuitable sales of unregulated collective investment schemes and sales of ARM bonds backed by life settlement policies.
The FSCS has not declared Rockingham in default but says it is monitoring the firm.
Page Russell director Tim Page says: “The PI market has always been on a claims made basis as insurers can withdraw their cover if they have concerns.”