Chase de Vere has highlighted that there remain a number of “challenges that need to be overcome” as it confirmed it is aware of conversations between a number of national firms and networks and an international insurance broker over collective cover for legacy liabilities.
A person with knowledge of the talks told FTAdviser that a number of large advice firms and networks are involved in early-stage talks with Marsh UK, a subsidiary of US-based Marsh and Mclennan, to provide cover for legacy advice.
Larger firms are effectively liable for any advice given by advisers over the lifetime of their business due to the lack of an industry long-stop. Last year Tenet launched a petition calling for a long-stop to be introduced, which has now garnered 4,500 signatures.
The person said the talks are too preliminary for details of how cover would be provided and what exclusions might be in place to have been discussed.
Chase de Vere confirmed it has been approached to be involved in the discussions, but Patrick Connolly, head of communications for the Somerset-based firm, said it is not in “active conversations”.
He told FTAdviser: “We have had conversations [about collective insurance]. We are watching to see what happens. We are not in active conversations but we are aware of it.
“I think there will be a risk that either premiums will not be as low, excess will be too high and there would be exclusions. There are a number of challenges that need to be overcome. We need to see the challenges can be overcome first before we commit.”
Tenet confirmed also confirmed it is actively involved in looking into a collective insurance solution, but that it is “very early days”.
Caroline Bradley, group finance director, said: “At the present moment in time we are watching with interest and will be happy to play an active part in helping to shape how it might work.”
Network Openwork told FTAdviser it has not been approached and marketing director Philip Martin said that while it is “a really interesting development" it is “not something we are looking at”.
Mr Martin said: “It could work and it is a really interesting development but it depends on how the premiums are calculated. It it goes on a uniform approach, it would not work.”
He warned that if it does go on a uniform approach, which “is maybe one way it could be shaped”, the better books of business could end up “subsidising the not so good books”.
Mr Martin added that firms who get involved need to ensure the price they are paying is relative to the risk they are carrying.
Mr Martin said: “If looking at individual risk, in an individual way, it could succeed.”
