Jersey Regulator Probes Firms' Indemnity Insurance
by Jason Gorringe, Lowtax.net, London
15 March, 2017
The Jersey Financial Services Commission is launching a review of financial services businesses under its supervision to ensure they hold adequate Professional Indemnity Insurance (PII).
The review follows several recent supervisory cases that have raised concerns about the suitability of companies' PII cover and the level of understanding that senior management have about the terms of their insurance.
The Commission's Supervision Division has identified policy exclusions that seemingly render cover inappropriate.
Focusing on the Investment, Fund Services, Trust Company, and General Insurance Mediation Business sectors, the review will assess a cross-section of firms and the level of cover they have in place. As part of the review, the Commission will also evaluate firms' practices when negotiating their cover and their respective experiences when making a claim.
As Jersey does not have a financial services compensation scheme (other than for bank deposits), the Commission said it is keen to stress to industry that adequate PII cover is essential for protecting clients as well as the firms themselves.
Over the coming days, the Commission will be contacting local companies requesting information about their current PII policies, any recent notifications, and any claims along with their related procedures.
Firms will need to provide this information by the end of April 2017, and a summary of the review's findings is expected to be published before the end of the year.
The Commission is encouraging all firms that are not reviewed to proactively check their own PII cover, ensuring that it meets the requirements of the relevant Codes of Practice.
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