The Finance Brokers Association of Australia has urged brokers to review their professional indemnity (PI) insurance as part of the industry’s transition to the Australian Financial Complaints Authority.
The Finance Brokers Association of Australia (FBAA) has urged brokers to review their professional indemnity (PI) insurance cover in response to an increase in award limits to be introduced by the Australian Financial Complaints Authority (AFCA) when it commences operations on 1 November.
FBAA executive director Peter White has said that AFCA has forecast an increase in the award limits from the current maximum of $323,500 for any one claim to $500,000.
“This change means that unless brokers review and potentially increase their PI insurance levels, they may not be adequately protected should a claim of this type be made after November 1,” Mr White said.
However, Mr White said that members who hold policies with FBAA’s preferred PI insurance provider, Insurance Advisernet Australia, would be covered.
“We have received written confirmation that the Finance Brokers PI Plus Policy with Insurance Advisernet will be altered to cover EDR awards up to $500,000 for any one claim or up to $1 million in the annual aggregate for all new policies and/or renewals issued as from November 1, 2018,” Mr White continued.
“It means any existing member’s policies that fall due for renewal after this date will benefit from an automatic increase to the above limits for no additional premium charge.”
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