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Official clarification on PII

From Eleanor Linto

I write to clarify a point in the article &#39How you can avoid a PI headache&#39 (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

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