Backstage with Keith Richards – Update on PFS engagement with FCA
28 May 2019
28 May 2019
The Personal Finance Society’s CEO Keith Richards discusses challenges facing the financial advice sector in 2019 and provides an update on current Personal Finance Society initiatives.
Update: FCA seeks to calm PII insurers over FOS increase
In my last blog on 8 May I explained to members how we had been engaging with Government and the FCA over market concerns in relation to the increase in the FOS compensation limit; particularly the immediate impact felt by members seeking to renew their PI insurance. Thanks to all of you that responded to our call for PII evidence; members from across the UK highlighted delays, large increases in premiums and exclusions being applied to renewals from PI insurers.
Recognising that their actions have had a material impact on the cost of PII, last week the FCA wrote to us and the PI insurance market in an attempt to help insurers better understand the key risks and potential impacts of both the FOS limit increase and defined benefit pension transfers. In particular, they provided information on:
- Additional governance arrangements introduced by the ombudsman service for high value complaints
- Data estimating the distribution of high value awards
The concluding suggestion was that only a small minority of ombudsman awards would be likely to exceed the previous awards limit.
This was a timely communication from FCA and will hopefully go some way to help mitigate some of the current concerns of PI insurers.
PFS will be continuing discussion with FCA and Treasury in the coming weeks, drawing on the experiences of members to highlight the growing risk exposure of small firms resulting from high PII excesses and exclusions as well as the immediate impact on the cost of insurance and therefore the increased cost to operate in a regulated environment with firms either having to absorb or pass on to clients.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.