Dual Australia will continue to offer professional indemnity (PI) insurance after its product was made RG126 compliant in line with new ASIC requirements set to kick in from July 1, 2008.
The Corporations Act 2001 was amended in January 2008 in a bid to protect consumers by ensuring all new financial services licencees had adequate levels of PI insurance in place.
As a result of the pending changes, as well as major financial collapses in the past two years, QBE Australia recently issued a statement saying it would withdraw its PI and directors and officers insurance.
In February 2008, FPA chief executive Jo-Anne Bloch told InvestorDaily the new requirements mandated by ASIC would increase PI insurance premiums disproportionately, which would hit small to medium-sized licensees hard and have little consumer benefit.
The process of meeting the requirements set by RG126 had not been an easy task, Dual Australia national underwriting manager Leo Abbruzzo said.
“There will be an increase in costs [premiums] because once again, licencees are required to meet the increased limits and cover, which only they can make a decision on,” Abruzzo said.
He said he did not believe the new regulation would result in fewer claims.
“[The regulation] hasn’t addressed that issue at all I don’t think,” he said.
