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Sense secures FSCS exemption removal in new PI deal

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    Sense Network has announced today (4 December) that it has reached agreement on its professional indemnity insurance terms for 2013, with prices remaining unchanged but terms amended to remove any exclusions for claims brought by the industry compensation scheme.

    The PII terms, which Sense said were brokered by ifaProsure, will be open to all members of the Sense Network.

    The key elements of the cover include:

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    • full cover for all RDR retail investment products;

    • excesses of £5,000 on investment products and £2,500 for mortgage and protection;

    • premium rates starting from a minimum of 1.2 per cent for investments and 0.6 per cent for mortgage and protection;

    • no exclusion for claims brought by the Financial Services Compensation Scheme; and

    • individual policies with limit of cover starting from £1.5m per firm.

    Steve Young (pictured), commercial director of Sense said, “Recent surveys have shown that quality PII cover is becoming more difficult to obtain and many adviser firms are relying upon policies which do not cover all products, have excesses of £10,000 and premiums of more than 3 per cent.

    “Quality PII cover is essential in this challenging regulatory environment and we are delighted to have secured comprehensive cover at highly attractive prices. The level and price of the cover is a testament to the quality of our risk management, our excellent claims record and the close working relationship that we have developed with ifaProsure.”

    In addition, Jonathan Newell, managing director of ifaProsure, has become a member of the Sense Investment Committee.

    Mr Newell said: “I am delighted that Sense has chosen to continue its association with ifaProsure. The close working relationship that we have developed translates into better PII cover for Sense members.”

    Last week, the FSCS confirmed that it is to hit investment intermediaries with a further levy of £25m in the New Year to cover claims against two stockbrokers that have exceeded expectations.

    Pritchard Stockbrokers and WorldSpreads, which both went into administration earlier this year, are expected to trigger compensation payments of £16m and £17m respectively.

    The FSCS has revised its forecast for investment compensation claims to £113m between July 1 2012 and June 30 2013. It had previously budgeted for £65m. When adjusted to take into account money reclaimed from firms in default and other sources, there was a £25m shortfall which advisers will fund.

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