Financial Conduct Authority  

FCA told to consider disclosing firms' PI details to clients

FCA told to consider disclosing firms' PI details to clients

The Financial Conduct Authority has been urged to consider changing its stance on revealing a firm's professional indemnity details to consumers who are left out of pocket. 

The suggestion was made by the Complaints Commissioner in a case escalated to the watchdog last month, in which a client sought redress after a financial services firm failed to pay a sum awarded by the Financial Ombudsman Service. 

The company - which the Complaints Commissioner did not identify - failed to pay the money as instructed by the Fos despite being taken to the courts, leading the client to ask the FCA for details of its PI insurer to pursue the claim. 

But the regulator declined this request on the grounds the insurer's details were confidential and only the regulated firm itself could disclose them. 

Complaints commissioner Antony Townsend said he sympathised with the client but ultimately sided with the FCA on its grounds of confidentiality. 

However, Mr Townsend invited the regulator to consider whether there was a case for changing the rules to allow for the disclosure of information about a regulated firm's PI insurer. 

He said: "I can see that there might be an argument for changing the rules to require firms to publish details of their PII insurance, but that is not something which I can deal with."

The debate surrounding professional indemnity insurance has reached fever pitch this year, with advisers facing premium increases and exclusions as insurers shunned a shrinking defined benefit market. 

Ricky Chan, director at IFS Wealth & Pensions, said: "I’m quite sympathetic towards the client here as they are clearly due compensation and the firm and professional indemnity insurer should pay them as soon as possible.

"However they needn’t worry as the amount will eventually be paid and would accrue interest too. There is also the FSCS if the worst came to worst."

Mr Chan said he agreed with the FCA on the grounds that details of a firm's insurer are confidential. 

He said: "At one extreme, it could be lead to PI insurers being targeted with speculative trades and negative press if they are exposed to firms with ombudsman complaints or specific advice sectors.

"This could destabilise the PI sector, with costs rising and fewer insurers.

"It’s also unnecessary as the claims process isn’t the client speaking directly with the PI insurer, which would probably not have staff trained to deal with the public." 

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