We have been told to suggest to our members that they take “a sit and wait approach” while NZI ascertains the best way to structure manage the new requirements to address FAPs while still protecting the individual advisers. Hence this article.
Once NZI does provide a solution on the structure to address PI for FAPs, what Aon can negotiate as a group for the TripleA (bulk buying benefit) is highly likely to be far more beneficial than what it will be for a FAP trying to fly solo in purchasing cover for their own PI requirements. Even if a standalone policy was achievable, it’s likely to be extremely expensive by comparison.
Both Aon and NZI have commented that they would question why any adviser firm would look at stepping outside the bulk buying benefits of the TripleA PI scheme.
Because the TripleA vets all advisers coming into our PI scheme we maintain a low claims rate compared to most other PI schemes. Even if there is the odd cowboy in the system, they are less likely to be in our scheme but rather driving higher premiums in other schemes!
There isn’t an abundance of insurers writing PI for advisers/brokers or even wanting to write business for FAPs. The market for writing PI for the adviser profession is not large even as the market becomes more regulated.