The Financial Conduct Authority (FCA) has completed its review into general insurance intermediaries’ professional indemnity – and the results are worrying.
The regulator claims it has found policies containing exclusion clauses which it deems as giving it “significant concerns”. It is feared that the scope of the cover may fall below the levels required by MIPRU.
In particular, it pinpointed four types of exclusion clauses: suitability of insurer (11 policies), unrated insurers (two policies), non-admitted insurers (13 policies), and insurer insolvency (140 policies).
In addition, the FCA noted what it described as high levels of inaccuracies within policies – particularly relating to whether policies provided the proper cover for Financial Ombudsman awards and for appointed representatives that a firm may have.
Pointing to clear examples of non-compliance, the FCA stated that it has already raised the concerns with the firms in question and is ensuring that corrective action is under way.
“We also expect insurers and managing general agents that provide PII in this area to review their products in light of the findings in this report to ensure they are consistent with the needs of those intermediaries to whom they are providing cover – including meeting the requirement of MIPRU,” the FCA said in its statement.
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