FSCS funding consultation envisages expanded PII cover

A consultation on funding of the Financial Services Compensation Scheme asks for views on whether more comprehensive Professional Indemnity Insurance is needed to reduce levels of FSCS claims. PII was intended to play a greater role for personal investment firms in protecting their clients; instead the FSCS has increasingly become the ‘first line of defence’ when a firm fails, said the Financial Conduct Authority in CP16/42. There will be a review of the PII market in 2017, with the regulator looking to make PII the ‘front stop’ ahead of firms failing and claims being made on the FSCS.