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Regulator to lower limit for waiver and offer offset

IFAs would be able to offset their professional indemnity insurance excess against their capital reserves and firms with annual turnovers of £10m or more would be exempt from PI cover under proposals outlined by the FSA this week.

Director of investment firms David Kenmir says the 5 per cent of IFA firms with £10m or more in annual turnover, such as IFA Falcon Group, as reported in last week&#39s issue of Money Marketing, would be able to apply for an exemption from having PI cover.

The current floor for firms wanting an exemption is£50m in capital.

In a series of wide-ranging proposals for solving the PI crisis gripping the IFA sector, the FSA also confirmed that it would publish a definition of misselling “very soon”.

It said that by July it would make permanent the temporary measures that it introduced last year which are aimed at encouraging PI underwriters to return to the IFA market.

The paper also said that 87 per cent of PI policies taken out since September 2002 have been underwritten by Chubb and Lloyd&#39s syndicates such as Magian and St Pauls. It goes on to say Magian has recently announced it has stopped underwriting PI for IFAs.

Syndaxi Financial Planning principal Robert Reid says: “There are only so many companies out there with capacity to take on new risk. I do not think that anything in these proposals will encourage insurers to come back into the market.”


Final-salary shortfalls sparks drive towards transferring

Fears of shortfalls in finalsalary schemes are driving more people to look at transferring preserved pension rights, says Millfield. The company says media coverage of the £100bn black hole in final-salary schemes and pension shortfalls on schemes winding up is pushing clients towards transferring. Millfield says many advisers are steering clear of pension transfers after […]


The FSA has given the Falcon group a waiver for its PI cover. Will this open the floodgates for more firms? “Yes, I don&#39t see why not. I see no problem with firms self-insuring, provided that firms have sufficient capital adequacy.” John Crayden, Fleet Mortgage, Insurance & Finance services “No, I don&#39t think it is […]

Matrix continues private equity project

Matrix Private Equity has established its second Matrix enterprise fund, a managed portfolio of between four and six enterprise investment schemes (EISs). The fund aims to provide capital growth and is similar to the previous fund which was introduced last year. It will be fully invested by April 2003 and has made two investments to […]

Norwich Union praises Government for Sandler suite announcement

Norwich Union has responded enthusiastically to the Government&#39s decision to reconsider the price cap on the stakeholder suite of products. It believes if the price cap is lifted the products will have stronger backing from providers and a greater chance of success with the public. NU has also welcomed the endorsement of the with-profits concept […]

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]


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