The Office of Fair Trading has launched a study into the current liability insurance crisis and risi...
The Office of Fair Trading has launched a study into the current liability insurance crisis and rising premiums, just as hundreds of IFAs are asking for a review of its regulatory restraints.
This investigation comes at a time when independent financial advisers (IFAs) are said to be struggling to obtain suitable Professional Indemnity Insurance (PII) because the threat of new mis-selling scandals has forced most PI insurers and brokers to stop offering PI cover.
The OFT review will look at public, product, professional and employers' liability insurance, in particular analysing huge increases in premiums, reported reductions in underwriting capacity and a gradual increase in the excess required by insurers.
However, it will go further than the Department for Work and Pensions' review announced in Gordon Brown's Pre-Budget Report, to review the Employer's Liability Insurance scheme.
Aim of this study is to understand why premiums have risen - using past and present levels - and question whether there are any lessons to be learned overseas, including Australia.
Review of the liability sector follows discussions between the OFT, ABI and government departments, and will maintain contact with government bodies while the different studies are conducted.
Findings will eventually be published in Spring 2003, but further work may be commissioned, depending on the findings.
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