The Personal Investment Management & Financial Advice Association (PIMFA) has called on the Financial Conduct Authority (FCA) to postpone the implementation of the Financial Ombudsman Service’s (FOS) compensation limits.
The publication of PS 19/8 revealed that FOS increased its compensation limit to £350,000, and the association has since been assessing the impact that it will have on firms, particularly those that are currently seeking to renew their Professional Indemnity Insurance (PII).
According to PIMFA, “it is clear” that, with less than one week to go before the rules are implemented on 1 April, a number of insurance companies are not yet in a position to confirm whether or not they will be able to offer terms reflecting the increased limit.
The body has claimed that many firms seeking to renew their cover will not be able to obtain cover that will reflect the revised FOS limit by 1 April 2019.
PIMFA flagged that the impact on the PII market was an area of “key concern” when it submitted its response to the consultation paper that announced the increased limit, and has expressed its disappointment with the regulator.
It has argued that, in setting an implementation date of 1 April, the FCA has “failed to properly assess” the impact on insurance companies and their ability to offer terms reflecting the changes in the compensation limit.
PIMFA has urged the regulator to “immediately postpone” the implementation of the rules and revisit the impact of the increase in the compensation limit on the PII market.
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