FPA calls for bids to set up PI solution

TheFinancial Planning Association(FPA) has moved a step closer to setting up its own in-house professional indemnity (PI) insurance solution for members, calling on a range of insurance providers to submit formal proposals before deciding on the final make up of the scheme.

The association put out the call for submission after the latest meeting of its Professional Indemnity Insurance Task Force in late November, where it decided it would pursue one of two options — either a master policy or a mutual discretionary fund — as a solution to the PI crisis affecting its members.

A third option, to pursue indemnity cover for members through offshore underwriters, was shelved at the meeting.

The master policy options would see the FPA take out a single umbrella policy to cover its principal members, while the mutual discretionary fund option would effectively result in the FPA setting up its own industry compensation scheme, funded entirely through member contributions.

The FPA will accept proposals from insurers, relating to setting up either of the two options, until the next meeting of its PI task force on January 22 next year.

The task force will then assess each of the submissions before putting a single proposal forward to be considered by the FPA board at its February meeting.

The chairman of the FPA’s PI task force, John Hewison, says the association will have to decide on a solution before the next major PI cover renewal period for financial planners next March.

“We have already had a number of submissions from people looking to provide solutions. We will now take the next step and ask them to put a final proposition on the table,” he says.