Professional indemnity insurance brokers have raised concerns about the financial strength of a new PI insurer.
Hoyl Underwriting Management, which offers cover underwritten by Elite Insurance, claims it can halt the trend of escalating premiums.
But PI brokers say advisers need to be aware that Elite Insurance is not rated by a recognised ratings agency, nor is it directly regulated by the FCA.
The insurer is domiciled in Gibraltar and regulated by the Financial Services Commissioner For Gibraltar. It operates in the UK through the European Economic Area passporting rules.
HUM is selling directly to advi-sers and not through PI brokers.
PI broker IFA Solutions managing director Jamie Newell says: “Our corporate governance only allows us to place business with insurers that hold a financial security rating from a recognised rating agency. To do otherwise would go against the duty of care we have to our clients.
“It is imperative that advisers are aware of this – without a rating you cannot know the financial strength of the firm. And while it is welcome to see a new entrant to the market, advisers should ensure they undertake appropriate due diligence.”
Howden Windsor associate director Umesh Puri says: “Our due diligence standards only allow us to work with insurers which are rated by Standard and Poor’s as A- or better.
“Firms need to satisfy themselves that their insurer will be around long-term and can meet its obligations if they make a claim, bearing in mind that claims can take several years to be settled.”
HUM director Paul Barnes (pictured) says: “We are partnering with Elite Insurance because it shares our view that there are excellent firms looking for PI coverage who are not achieving any differentiated consideration.
“Elite is big enough to vouch for itself but after research we are very happy it is a company that understands the product, has an excellent approach to claims and is financially sound. It has a substantial book of solicitors PI cover and is used by some of the largest brokers.”