FSA: No impact on PII as FOS limit raised to £150k

Did I miss something?

One would expect a regulator of financial services to understand that insurance premiums are calculated according to the potential level of risk and that cost forms the basis of the insurance premiums to be shared out amongst policyholders. To state that raising the potential maximum claim by 50% would not cause an increase in premiums shows that they do not. If the FSA cannot grasp that simple principle, why should we retain any hope that they may eventually understand more complex issues like how IFAs work?

Posted by: Mike Reynolds

Really ?

FSA (nee'SIB) had not done its homework on the impact of PI during the Pensions Review Phase 1 ...PII insurers refused to allow advisers to invite claims and still be insured..it took Norwich Union if memory serves to buy a PII insurer to break the deadlock (London & Edinburgh I think..how did that work out for the insured IFAs subsequently ??)... and I haven't seen evidence it's any more clued up now - because the PII insurers will simply move the bar on the excess higher..so IFAs will have a bigger goal to "defend" that complainants can try scoring into. Why is it "free" under all and any circumstances for people to take complaints to the FOS - and - if FSA do remove the 2 stage process will complaints increase as they can go directly to FOS..for free.. without having to worry about a truthful "defence" from the regulated firm getting in the way of the desire to seek compenstion for this, that and the other. For how many complainants has the question of prosecuting them for attempted fraud ever been raised..because whilst some complaints are valid, some are not and some are frankly a try on as a simple attempt to crow bar money out of the simple and free (to them) "system"... where is the balance here for the regulated firm ? When will FSA/FOS/FSCS recognise pre-N2 complaints are different and must be viewed as the PIAOB would have, which includes recognition of the 15 year longstop ?

Posted by: B. A former IFA

FSA Talking Nonsense Again

I've just chekced with our PI insurer and they are pretty sure that premiums will rise due to this limit increase. So, either the FSA are stupid, or they are lying. They are probably both.

Posted by: Steven Farrall (Adviser Alliance)

FSA: No impact on PII as FOS limit raised.

Look - if the FSA says that there shouldn't be any increase in PII premiums then we should all stop worrying. They will have done their homework ! Just because they have proved themselves completely incompetent in the past and that everything they have done to date has brought about unintended consequences, doesn't mean we should automatically distrust their opinion. After all,the staff at Canary Wharf have undergone a rigorous selection process based upon their intelligence, qualifications and experience - and if they get it wrong they will take full responsibility, just like our elected Members of Parliament.

Posted by: bill wells

Statements of FACT which have no evidence to back it up are FRAUD

Who at the FSA has stated this? They cannot be "Nameless", as I AM Nameless. If an individual is allowed to make this statement on behalf of the FSA and they have NOT asked PI insuers and documented the reply from the insuers and are then making these statements of FACT via a publication such as IFAonline with nothinbg to back up these statements, then people (IFAs) will make decisions based on these statements, which are potential misrepresentations and if they are made KNOWINGLEY, that is FRAUDULENT MISREPRESENTATION. Can the journalist please quote their source so that any IFA, whose PI premiums go un next year significantly becuase of this increase can then ask the SFO to investigate the whether these statements are truly Fraudulent or just an expensive "mistake", which we can of course all forgive as it's only money...

Posted by: Nameless

Evidence on file

As has been mentioned, this seems to be a rather fanciful notion on the part of the FSA, increased risk generally means increased costs in the insurance world. Presumably the FSA will have done research which will evidence this claim. What is also interesting is the comment "The administrative costs of its proposals to firms are estimated at £24m-£82m a year". That's quite a range. A bit like the comments from Hector Sants earlier this year about the impact of mis-selling costing investors some £250million based on their research. He then went on to say the true figure was probably more like £450 million (no evidence however) but they'll call it £600million anyway. I suppose you can do this when there's no real accountability. Hey ho

Posted by: Duncan Carter

Did I miss something?

I don't seem to see any remarks concerning the new complaints procedures. What exactly are these? If the 2 stage system is unsatisfactory (and when one considers the banks it probably is) does this mean that complainants will go straight to the FOS - with or without notifying the IFA?? Of course the sensible plan would be to have on complaints procedure for the large organisations (who have an appalling record) and a different one for the smaller guys (who generally have a much better record). But as always – fat chance!

Posted by: Harry Katz