Context
The European Insurance and Occupational Pensions Authority (EIOPA) has published its draft Regulatory Technical Standards (RTS) adapting the base euro amounts for the professional indemnity insurance (PII) cover and financial capacity of intermediaries under the Insurance Distribution Directive (IDD). It should be noted that the FCA is under no obligation to change these limits in the UK from those stated in the current FCA rules. Having said that, UKGI understands that the FCA is aware of the changes recommended by EIOPA and will consider the issue.
Key points to note
The IDD prescribes that changes to the minimum amounts shall be based on the rate of inflation. As the Harmonised Index of Consumer Prices (HICP) rose by 20.32% between 1 January 2018 and 31 December 2022, the new base amounts would be as follows:
- The base PII amount applying to each claim is to increase from €1,300,380 to €1,564,610 [ an increase of €264,230]
- The base aggregate PII amount per year is to increase from €1,924,560 to €2,315,610 [ (an increase of €391,050]
Next actions
None – for information and awareness.