FPA set to decide on PI solution
TheFinancial Planning Association(FPA) could have its own in-house professional indemnity (PI) solution for members within a month, if the association approves a proposal to set up the scheme at its board meeting this week.
The scheme, being proposed by an as yet unnamed international underwriter, would see the FPA set up a single master policy to cover all its principal members.
The scheme was chosen for board approval ahead of two other similar proposals by the FPA’s Professional Indemnity Insurance Taskforce.
Last November, the taskforce called on a range of underwriters to submit formal proposals to set up an in-house PI insurance scheme for the FPA.
If approved, the master policy scheme could be up and running within a month to coincide with the next major group PI renewal period for financial planners in March.
The taskforce’s chairman, John Hewison, says the scheme could spell the end of the year-long crisis over PI cover for financial planners.
Over the last 12 months, the number of insurers willing to offer PI cover to financial planners in Australia has dwindled, resulting in vastly escalating premiums for those whose cover has come up for renewal.
In one case uncovered by the FPA, the premium quoted for the professional indemnity cover of one financial planner jumped from $6,000 in 2001 to $66,000 in 2002.
“This is a significant break from the traditional individual cover that members have got and we are very enthusiastic about the deal that can be provided, which is obviously a better deal for the public because members will be able to get the sort of cover to protect the public interest,” Hewison says.
Hewison says the FPA will also pursue membership of the Professional Standards Council as part of its campaign on professional indemnity insurance.
He says the move will aid the underwriter proposing the master policy scheme because it indicates a further commitment to professional standards on the part of FPA members.
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