The Australian Securities and Investments Commission (ASIC) has acknowledged the trouble some financial advisers are experiencing in obtaining professional indemnity (PI) insurance.
The acknowledgement is contained in ASIC’s latest report overviewing licensing and professional registration applications and represents one of the regulator’s first formal acknowledgements that obtaining PI coverage has become an increasing problem for advisers.
However, ASIC’s only advice to advisers who are experiencing problems obtaining PI is that they should start the process early to give themselves time to overcome any issues which would impact on their licensing.
“We are aware that some applicants are experiencing difficulty in obtaining PI insurance that meets the requirements specified in our regulatory guidance,” the ASIC document said.
It said that the problems it had identified including policies involving a significant excess compared to the premium and the complexity in PI policy terms and unacceptable exclusions to coverage.
“Given the difficulty some applicants are experiencing in obtaining adequate PI insurance, ASIC encourages applicants to engage with their proposed insurer as early as practicable to minimise potential delays associated in finalising a licence application,” the regulator said.