The Financial Conduct Authority has warned the coronavirus crisis is no excuse for advisers not to renew their professional indemnity insurance "in a timely manner", saying the market was still functioning.
In an update on its website yesterday (April 21) the regulator said it was aware some financial advice firms were concerned the pandemic and national lockdown may affect their ability to renew cover.
But the watchdog said its own discussions with brokers and insurers had "given no indication" that the crisis was preventing the latter from renewing policies, with the FCA instead stating professional indemnity insurance "remained available" in the market.
The FCA said: "Our position remains that firms need to have PII policies in place in accordance with our rules to support their ability to meet liabilities as they fall due and to protect their consumers.
"It is ultimately a commercial decision for insurers about what cover they will offer including cost and on what terms.
"But they need to meet their regulatory obligations, including when manufacturing, distributing and writing a contract of insurance."
The regulator pointed to an "evolving" professional indemnity insurance market and promised it was continuing to asses how insurers had been reviewing their approach to underwriting in the current circumstances.
The FCA also said it was aware insurers may seek "more detailed information to understand the risk of a particular firm".
The watchdog added: "Where we see evidence that insurers’ ability to process renewals is being affected, we will consider taking action in line with our approach to supervision."
Last month the Personal Finance Society called for a four-month grace period for advisers whose professional indemnity insurance is due for renewal during the coronavirus lockdown.
The PFS said there was evidence the availability of cover had continued to reduce and renewals had been "seriously impacted" by lockdown measures.
In a letter sent to the FCA and HM Treasury the professional body asked for regulatory concessions to help advisers at at time when "demand for their help has never been greater, yet pressure on their own resources are stretched".
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