The FCA has published its thematic review report on general insurance intermediaries’ professional indemnity insurance (PII).
The review was conducted to evaluate the individual policies purchased by some firms to assess whether they complied with the requirements of the Prudential Sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU) and to determine how effectively the general PII market was functioning.
The FCA’s findings included that:
- Firms were able to obtain cover for claims that might arise from the range of their general insurance business;
- Firms were able to obtain cover for high levels of indemnity, and in some cases, firms did not have the minimum level of cover required under MIPRU or had a policy excess greater than that permitted;
- Often policies contained exclusion clauses with the possible effect of reducing the scope of the cover below that required by MIPRU. These related to four broad types of exclusion clauses (the suitability of the insurer, unrated insurers, non-admitted insurers and insurer insolvency); and
- Many policies had inadvertent gaps in coverage or inaccuracies indicating that they had not been subject to appropriate review by firms themselves.
The FCA expects:
- All general insurance intermediaries that were not part of the review to REVIEW THEIR PII POLICIES to ensure that they meet MIPRU requirements.
- Insurers and managing general agents, which provide PII to general insurance intermediaries, to review their products in light of the report to ensure that they are consistent with the needs of those intermediaries to whom they provide cove
A copy of the report is available. http://bit.ly/2gZtsGD
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