RMA-E: Professional Indemnity Insurance

Read our help text for Gabriel submission RMA-E: Professional Indemnity Insurance.

1. Does your firm hold a comparable guarantee or equivalent cover in lieu of PII, or is otherwise exempt? This question is greyed out where it is not applicable. If this question is available for your firm, you should only answer 'yes' if your firm is exempt from PII requirements, or have an eligible comparable guarantee or equivalent cover in place (please see our FAQs on PII requirements and comparable guarantees for further information).

If you answer 'yes' to question 1, you should not answer any more questions in this section.

2. If your firm does not hold a comparable guarantee or equivalent cover and is not exempt, does your firm have a PII policy in place? This should be answered 'yes' if the firm has a PII policy in place, or 'no' if it does not have PII.

If you answer 'no' to question 2, you should not answer any more questions in this section.

3. Has your firm renewed its PII cover since the last reporting date? This question should only be answered 'yes' if the firm has renewed its PII policy during this reporting period.

If you answer 'no' to question 2, you should not answer any more questions in this section.

Newly authorised firms should answer ‘yes’ to the renewal question, as you are expected to provide your policy details on your first return, even if your policy did not commence during the reporting period.

Firms with a policy period longer than one year should report annually. You can check your submission history to ensure details have been included in the past year.

PII Basic information

Question 4

This information is only required if you have answered 'Yes' to question 3.

A, B and C. Mortgage/Insurance/Retail investments advising/arranging – Indicate in these fields which activities the policy covers.

D. Retroactive start date – This field should only be completed if the firm's PII policy does not cover its activities from the date it became authorised. Where there is no retroactive start date the ‘retroactive start date (if any)’ must be blank. Where there is such a date, firms must ensure that the date either corresponds to their original authorisation date or pre-dates their authorisation.

E. Annualised premium – Annual cost of the PII policy.

F. Insurer – Choose from your insurer from the drop down list or choose 'other' if your insurer. is not listed.

G. Start date – Date the policy was taken out/ renewed (in date format, i.e. DD/MM/YYYY).

H. End date – Date the policy expires (in date format, i.e. DD/MM/YYYY).

Limits of indemnity

IDD firms who fall within the scope of the Insurance Distribution Directive should state their indemnity limits in Euros. If cover has been taken out in a currency other than the Euro, you must ensure that it meets the minimum indemnity limits when converted into Euros, both when the policy is first agreed and at renewal. To ensure this you should use the appropriate exchange rate on the relevant day.

If a firm's limit of indemnity is based on 'any one claim' or 'each and every claim' therefore unlimited in the aggregate, the firm should select the relevant currency in 4I, enter the relevant single limit in 4J and then select ‘unlimited’ in the aggregate field in 4O, leaving 4K blank.

However, if it is written on an 'any one claim and in the aggregate' or 'each and every claim and in the aggregate', this means that a firm's limit of indemnity is applicable to both single and aggregate limits and it should enter the relevant limit in 4J and 4K.

If a firm has a cap limit for single and aggregate, the firm should enter the relevant limits in 4J and 4K respectively.

Under the Insurance Distribution Directive the minimum limit of indemnity are:

(1) for a single claim, €1,250,000; and

(2) in aggregate, €1,850,000 or, if higher, 10% of annual income up to £30m.

If a firm has separate limits for mortgage and Insurance distribution, they should report the limits as they relate to insurance distribution.

PII detailed information

Business line and excesses

L and M. Indicate the business lines your PII policy covers and the policy excess relating to that business line and should be completed in line with the following guidance.

If your firm only has one excess for all activities covered by the policy, you should select 'All' - (All does not mean all business lines in our drop down box, it means all business lines covered by your policy).

If your firm has one or more business lines with an increased excess, you should choose these business lines from the drop down box and input the relevant excess. For all other business lines that have a standard excess, you should select 'all other'.

('All other' does not mean all business lines in our drop down box, it means all remaining business lines covered by your policy).

Please note that all firms will fall into either of the above scenarios and as such this data item will not validate unless you select 'all' or 'all other' once in this section of the data item.

N. Policy exclusions

List any business lines that your policy does not cover - please note that you need only include any business lines that your firm has ever undertaken and expect to undertake within the life of the policy.

5. Annual income as stated on the most recent proposal form – For a personal investment firm, this is 'relevant income' arising from all of the firm's activities for the last accounting year (IPRU(INV) 13.1.8 R).

For insurance intermediaries and mortgage intermediaries this is the annual income given in the firm's most recent annual financial statement from the relevant regulated activity or activities (MIPRU 4.3.1R to 4.3.3R).

6. Amount of additional capital required for increased excess(es) (where applicable, total amount for all policies) – Investment firms must hold sufficient additional capital resources in accordance with IPRU (INV)13.1.27R where the excess on any claim is more than £5,000.

Mortgage and general insurance firms must hold sufficient additional capital resources in accordance with MIPRU 3.2.10R - MIPRU 3.2.12R where the excess on any claim is:

i) the greater of £2,500; and 1.5% of annual income for firms not holding client money; or

ii) the greater of £5,000 and 3% of annual income for firms holding client money.

We would encourage all firms to consult the tables in IPRU(INV) 13.1.27R or MIPRU 3.2.14R as appropriate. Please see our FAQs for assistance in calculating this additional capital requirement.

Questions 7 to 10 (Only to be completed by firms that undertake retail investment activities).

7. Total amount of additional own funds required for policy exclusion(s) – If your firm does not have any policy exclusions, you can insert '0' in (7H) . If your firm does have policy exclusions, please see our FAQs for assistance in calculating this additional capital requirement.

8. Total of additional own funds required – This is the sum of (6H and 7H).

9. Total of readily realisable own funds – This is the amount of the firm's own funds that can be turned into cash within 90 days. Please see our FAQs for guidance on what constitutes 'readily realisable own funds'.

10. Excess/deficit of readily realisable own funds – This is 9H - 8H.

Further information

RMA-E frequently asked questions