The LIA and Aifa are urging the Office of Fair Trading to recognise the “monopolistic nature” of the IFA professional indemnity market and take action to address these competition concerns.
The trade bodies say it is essential as part of its review of employer liability insurance that the OFT considers the crisis in the IFA PI market. The LIA says the OFT should refer the matter to the Competition Commission which can intervene in the market.
The OFT is expected to publish its report in the spring and, while it is believed it will touch upon PI, it is not known to what extent the issue will feature in the report.
LIA head of public affairs John Ellis says: “There are serious competition concerns in the PI market. It is showing signs of a monopolistic nature with no proper competition available. The OFT needs to refer the matter to the Competition Commission which could then take action to force insurers to reduce their prices.”
Aifa director of policy Fay Goddard says: “I would hope that the OFT would recognise the extent of the problem in the PI market. The problems are worse than those in other areas of employers' liability insurance.”
OFT spokesman Mark Kram says: “It is something we are looking at as part of the overall review of liability insurance.”