From Eleanor Linto
I write to clarify a point in the article 'How you can avoid a PI headache' (Mortgage Strategy May 24).
Our final rules set out the minimum levels of indemnity for insurance and mortgage mediation activities respectively. For a firm carrying on insurance mediation this is e1m for a single claim and in aggregate e1.5m or, if higher 10% of annual income up to £30m.
For a firm carrying on mortgage mediation the requirement is either (i) cover per claim equal to £100,000 or, if higher, 10% of annual income or (ii) aggregate cover equal to £500,000 or, if higher, 10% of annual income.
Both these limits are subject to an upper ceiling of £1m. Whilst a firm that carries on both insurance and mortgage mediation will have to make provision for both, the PII requirements are not additive as suggested in the article. A firm must meet the higher of the two requirements.
Head of policy and technical standards
High Street Firms Division
Financial Services Authority