View more on these topics

Reality bites into EU&#39s PI policy

Perhaps some sanity may prevail over European Union policy on PI insurance when it runs into that reliable frustrator of many a political initiative – reality.

The EU is requiring intermediaries to have h1.5m of cover from next year. This is bad news for the UK&#39s IFAs which could see their burden increase even further.

The FSA has accepted that it will not be able to stop the insurance mediation directive bringing in this onerous and, in Money Marketing&#39s view, absolutely unnecessary requirement next year.

But, as was revealed by FSA managing director David Kenmir in the Fair Deal for IFAs forum, the regulator has at least secured an early review date from Brussels.

The FSA is hoping that in a few years hence it can change the requirement to a combination of PI and cash in the business to make up the h1.5m level.

And where is reality biting? Well, all those brokers in the EU which are currently unregulated face having to get PI, too. Where shall Greek brokers, to take the example used by Kenmir, source this cover?

Well, until recently, many on the continent thought that the market might be served by Lloyd&#39s of London, the insurance market which is as every IFA knows awash with affordable cover. Or not. Indeed, apparently, Lloyd&#39s is bemused that it might be seen as any sort of source for cover for Europe when it is reluctant to service a market it already knows here.

All this is actually good news when policy hits reality.

The problem is that it cannot be changed in the short term. The FSA has accepted the European move as inevitable. But before a review can happen, it could very well be the straw that breaks many a broker&#39s back.

Recommended

Structured products to be next misselling risk – FOS

The FOS has predicted that structured products could become the next misselling scandal to follow from the current spate of mortgage-endowment related complaints. Speaking at the Building Societies Association&#39s annual conference in Manchester, Ombudsman Caroline Mitchell said she revealed numbers of complaints about these products have been increasing saying she is currently receiving around 70 […]

Ship sets a course

The industry is unanimously opposed to the absence of any clear plans to regulate home-reversion schemes. The regulatory no man&#39s land in which home reversion resides needs to be managed by providers and advisers to ensure that customers not only receive appropriate advice but also the product which is most suitable for their needs. Lifetime […]

Product matters

You may groan at the thought of another New Star fund and wonder how this one can differentiate itself from some of the other funds in the stable. Well, for a start, its UK special situations offering is a tiny fund at only £2.5m and it is not being run by a fund manager you […]

Keep it in the family

Simplification is set to change the world of pensions forever. Due to take effect from April 2006, the sweeping reforms outlined in the Inland Revenue Green Paper which are due to be enshrined in the Finance Act 2004, will usher in a whole new way of investing in pensions. Gone will be the pettifogging rules […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment