Here we set out our position on the impact the coronavirus (Covid-19) crisis is having on professional indemnity insurance (PII) for financial advisers.
We recognise that the PII market is evolving. Some firms may be concerned that the current coronavirus situation may affect their ability to renew PII in a timely manner, impacting their operational resilience. We are continuing to assess how insurers have been reviewing their approach to underwriting. And we are aware that they may seek more detailed information to understand the risk of a particular firm.
We have engaged with the International Underwriting Association (IUA) and have spoken directly with individual insurers and brokers. Our discussions indicate that PII cover remains available in the market and the crisis is not preventing insurers from undertaking the renewals process.
Our position remains that firms need to have PII policies in place in accordance with our rules to support their ability to meet liabilities as they fall due and to protect their consumers. It is ultimately a commercial decision for insurers about what cover they will offer including cost and on what terms. But they need to meet their regulatory obligations, including when manufacturing, distributing and writing a contract of insurance.
We will continue to monitor the impact that coronavirus has on all firms’ operational resilience, including insurers. Where we see evidence that insurers’ ability to process renewals is being affected, we will consider taking action in line with our approach to supervision.
Where an individual firm has concerns it will be unable to secure appropriate PII cover, including at the point of renewal, it should notify us in their usual way.