IFAs taking out 18-month PI policies risk breaching EU rules on minimum insurance req-uirements, warns Collegiate managing director Tony Howe.Howe says an increasing number of brokers are offering 18-month policies to stop their competitors picking up clients on their renewal date. But he says these policies are rendered useless by the ann-ual 1.1m limit of indemnity required by EU directives. He says if at the end of one year there has been an erosion of cover below the LOI, the IFA would have to top up the cover. While cover can be eroded during the 12 months from the start of the policy, the full 1.1m cover is required on the ann-iversary of the policy taking effect. This means that an IFA can blow the 1.1m requirement on day one of the policy without breaching EU rules but will need to buy more cover to meet the LOI as the policy enters the last six months of an 18-month term. Howe says IFAs will find it difficult to find an underwriter to reinstate the cover at a reasonable price and may be left unprotected. He says: “These policies can be effectively useless once the one year is up. The message for IFAs is beware idiots bearing gifts.” The FSA says it works on the basis of 12-month policies but declined to comment further.
Absolute Return Bond Fund
Threadneedle Investments has brought out the absolute return bond fund, an Oeic that aims to provide a positive return in any stock market environment.The fund will invest in bonds, bond market derivatives and money market instruments under the Ucits III directive. It aims to beat a cash benchmark a target of 60 per cent above […]
The Pensions Regulator says UK plc’s 130bn pension deficit could be paid off within 10 years with minimum disruption to the economy. It believes that up to 80 per cent of companies could realistically close their deficits without facing more than a 25 per cent reduction in their free cashflow. But the TPR’s reliance on […]
Zenith European Income Fund
Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.
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