PI cover for increase to FOS award limit

YOUR COMPLIANCE MATTERS:   PI cover for increase to FOS award limit

Relevance:                   All firms.

Action required:           Check that your PII policy covers the increased FOS compensation award limits

The change to the FOS award limit to successful complainants became effective from 01 April 2019.

As a reminder, the new levels are as follows:

·          £350,000 for complaints about acts or omissions by firms on or after 1 April 2019;

·          £160,000 for complaints about acts or omissions by firms before 1 April 2019, and which are referred to the ombudsman service after that date.

·          Both award limits will be automatically adjusted annually on 1 April to ensure they keep pace with inflation, as measured by the Consumer Prices Index (CPI

All firms need to check that their own Professional Indemnity Insurance (PII) policy provides the cover for these increased amounts and circumstances, as required by FCA Rules.

If in doubt, speak to the insurer/intermediary/broker you have made the arrangements with.

We have also become aware that the FCA has issued emails to a number of firms in this respect and if a firm is unable to confirm that they have the relevant cover in place, they are being asked to notify the FCA’s Contact Centre accordingly, with details of how they expect to gain the appropriate cover.

If you need to discuss any aspect of this newsletter, please contact us.