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Umbrella opens to cover low-risk IFAs

The first captive offshore professional indemnity insurer is all set

to offer small to medium-size IFAs shelter from the PI storm.

Trading under the Umbrella brand, the unnamed group is planning to

offer up to 500 firms PI cover. The scheme is being specifically

aimed at “low-risk” firms with turnover below £1m.

Law firm ProAct will operate as a project manager in assessing

potential member firms using filtering questions.

Successful firms must fit a risk profile and preferably have

completed the pension review or have been established after 1999.

They ideally will have a book with less than 5 per cent endowment

cases but the insurer is keen to emphasise that firms which have

split-capital business will not necessarily be excluded.

The insurer is authorised and acting as a captive insurer offshore on

the Isle of Man. It has some exposure to the IFA market but is

looking to expand into the UK financial services market.

Several reinsurers are looking to sign with the project including a

Lloyd&#39s of London syndicate, as well as an American and a German firm.

The group is aiming eventually to offer a 24-month contract to firms,

with a model premium at £15,000-£20,000. It will establish

a fund totalling between £7.5m and £10m to cover


ProAct says it has already received 110 faxes from interested firms

and aims to process data by mid-April. Once this has been completed,

the group will then go to the FSA for approval in mid-May.

ProAct Legal partner Gareth Fatchett says: “Compared with insuring

American doctors, UK IFAs are a walk in the park. The reinsurer and

the insurer will decide between them what level of exposure to risk

they want to take by mid-April and things will go quickly from there.

For firms without cover, this will provide the best solution




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