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PIA gets tough as IFAs shun new PI cover

Thousands of IFAs may face suspension by the PIA over PI cover as new


research reveals 75 per cent face difficulties obtaining compliant


policies.


The regulator has accused IFAs of having “given up the ghost” and of “not


bothering to get PI cover or giving up too easily”.


Spokeswoman Sarah Modlock says: “Some are not letting us know they are not


covered and are carrying on regardless.”


The regulator says the problem has arisen despite it relaxing the rules


governing PI cover in October. The PIA is aware of cases of IFAs continuing


to do business without cover but will not divulge numbers and openly says


offenders will be suspended. The warning comes as the ABI life offices


group-funded Pension Advisers Support System has set up a PI emergency


scheme.


It has vetted and set up a panel of brokers to identify insurance cover


suitable for IFAs and a panel of solicitors experienced in dealing with PI


insurers and IFAs.


IFAs registered with Pass will be able to contact the Pass helpdesk as the


first port of call.


Pass has made the move on the back of independent research showing that up


to 75 per cent of IFAs are suffering PI problems.


Pass commissioned Opinion Research Corporation to probe more than 450


IFAs&#39 experience of the pension review. Three-quarters said although they


had PI cover, they were worried about renewals. Others were carrying


non-compliant cover because of increasing excesses.


The research also says some IFAs were finding cases arising under phase


two were excluded from policies.


The helpdesk will assess individual IFAs&#39 problems and suggest a member of


the panel who may be able to help.


PI brokers claim the problem is improving and IFAs should contact quality


brokers with a good knowledge of the market.


Society of Financial Advisers chairman and IFA Robert Reid says: “This


started as a small problem but has ballooned because of the cost and


excesses which have risen to the level where there is effectively no cover


at all.”

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