Insurer ‘selective’ on D&O insurance for planning businesses
A number of insurers appear to have tightened up their criteria for approving directors and officers (D&O) insurance to financial planning groups because of concerns about the implications of the Government's Future of Financial Advice changes.
However Suncorp-owned Vero denied suggestions made to Money Management that it had actually stopped offering the insurance, saying that, instead, it was continuing to provide cover on a selective basis and "depending upon the profile of those to be insured".
Confirmation of Vero's selective approach on the delivery of D&O insurance follows on from the company earlier this month confirming that it had also adopted a "selective" approach with respect to delivery of professional indemnity insurance for financial planners.
The spokesman said the company's attitude reflected an increase in the level of disputes and litigation impacting companies in the planning area.
The Federal Opposition has used Senate Estimates to question the Australian Securities and Investments Commission (ASIC) about the tightening environment with respect to the provision of professional indemnity insurance and is expected to pursue the matter further.
Commenting on the debate around professional indemnity, Premium Wealth Management chief executive Paul Harding-Davis said the current situation was problematic in circumstances where planners could not operate in the absence of cover.
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