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Umbrella struggles to raise £1m to go public

Project Umbrella, the proposed captive IFA professional indemnity insurer launched in a blaze of glory in March, has yet to raise the £1m capital it needs to go public.

The scheme, which is aiming to offer PI cover to up to 500 small IFA firms, says it needs to raise £1m to cover capital-adequacy requirements from IFAs looking for cover.

Law firm ProAct Legal, which is the project manager, says it has funding to provide up to £10m to offer cover to firms but is calling on IFAs looking for affordable PI to pay the initial cash to meet the costs of getting the project off the ground.

ProAct plans to write to every firm which expressed initial interest to ask if they would be willing to invest in the scheme and become part-owners in a PI insurer.

Despite initial plans to seek FSA authorisation in May, Project Umbrella has yet to approach the regulator and is hoping to go live in time for the November renewal season.

ProAct Legal partner Gareth Fatchett says: “We are ready at the last stages. It is a matter of raising the capital that is necessary to make it a viable business proposition.

“IFA firms are so shortsighted that they are not willing to put up the cash but will then find themselves without PI cover next year.”

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