Money Marketing

28 October 2009

By Nicole Blackmore

PYV has warned that professional indemnity premiums and excesses could increase for all IFA firms as a result of the FSA forcing big structured product sellers to review their past business.

PYV director Ian Boscoe says underwriters will look to balance their exposure. He says: “This will affect all firms, even the smaller ones that did not deal with structured products. If underwriters are paying claims for larger firms on their book, they will have to spread the cost across the book.

“Even if there are not any significant claims for compensation, most underwriters will react anyway because they will see the review as a threat and will be concerned about potential claims.”

Threesixty has warned advisers to consult their PI insurers before reviewing their structured product back book to ensure they do not invalidate their cover.

Threesixty strategy consultant Phil Billingham says: “Advisers would do well to have a conversation with their PI insurers about what review.

Collegiate Management Services head of underwriting Richard Turnbull adds: “All good PI insurers will issue guidance on the review that does not contravene their terms of cover. I would be surprised if insurers did not want to be involved in this process from the very beginning.”