Among the topics included in the FCA’s latest Quarterly Consultation Paper, just published, is a proposed increase of around 4% in the minimum levels of professional indemnity insurance (PII) firms must hold.
The proposed increases would bring the FCA Handbook’s provisions in line with those of the Insurance Distribution Directive (IDD) as amended by Commission Delegated Regulation (EU) 2019/1935.
The FCA describes the relatively modest increase as essentially keeping pace with inflation so as to protect consumers – by providing a source from which redress liabilities can be met beyond a firm’s capital.
As with the IDD, the proposed increases are as follows:
- The single claim limit goes up from €1,250,000 to €1,300,380
- The aggregate limit goes up from €1,850,000 to €1,924,560.
In this instance, the FCA is inviting firms to respond by 4 February 2021 to the specific question ‘Do you agree with the proposed changes to the minimum levels of professional indemnity insurance (PII) cover?’
The consultation paper acknowledges that ‘some firms have faced increasing costs and complexity in securing PII cover in recent years.’
Firms wishing to express broader concerns around PII, its cost and availability, or the prospect of future limit increases, are encouraged to respond to the FCA’s Call for Input: The Consumer Investments Market by 15 December 2020.
If you would like to know more about this or any other compliance related issue, please contact a member of our expert team on 01925 765777, or email us at info@ukgigroup.com.