Context
The FCA has published final rules for a redress scheme for former members of the British Steel Pension Scheme (BSPS) who received unsuitable advice to transfer out. The FCA expects that over 1000 consumers will receive redress as a result.
In a Dear CEO letter, the FCA sets out its expectations in relation to associated claims made by firms against their Professional Indemnity Insurance.
Key points to note
- The FCA expects insurance firms to be able to give an opinion of whether their PII policies are likely to respond to claims about BSPS advice.
- Where the PII policy is not expected to respond to such claims, a summary of the reasons for this.
- Where there is any other relevant information in relation to the cover – for example around the process under the contract for making a notification or claim – to draw that to the attention of the policyholder if relevant.
Where BSPS scheme firms make notifications/claims the FCA expects that PII insurers will:
- Consider notifications promptly and fairly (including whether any notification that has already been made by the BSPS firm under the policy has in the insurer’s opinion engaged or preserved cover in respect of some or all BSPS advice),
- Communicate to BSPS scheme firms the outcomes of their notification (to understand their position and how to make a claim), and
- Handle claims promptly and fairly including to pay out claims promptly (once settlement terms are agreed).
Next actions
If relevant to your firm, ensure that you can meet the FCA’s expectations.