For some 10 years now the European Commission has been keen to establish an EU-wide framework for regulating mortgages. In the maelstrom caused by the global financial crisis, the idea has gained further momentum and, at the end of March this year, the EC published a proposed directive concerned specifically with residential mortgages.
Apparently focused on consumer protection, the new proposal aims to standardise regulatory measures across the whole life cycle of a mortgage. And amongst its recommendations is a requirement covering both the minimum capital level and the amount of professional indemnity insurance to be held by lenders.
As reported on ftadviser.com, there doesn’t appear to be much in the proposal that isn’t already covered, in principle and in practice, by existing UK regulatory arrangements – meaning that if the directive were to be implemented, the UK mortgage lending industry would be likely to find new costs and burdens placed upon it with no corresponding increase in protection for consumers.
You can obtain highly competitive professional indemnity insurance cover for hundreds of different professions by calling at 01480 470220.
Solicitors’ Professional Indemnity Insurance (PI) only valid when acting as solicitors
Another recent court ruling has highlighted the important point that whilst professional indemnity insurance is there to protect professionals, it only applies when they’re acting in a designated professional capacity.
In the case in question, the issue turned on whether Mr Brown’s professional indemnity insurers (Zurich Professional Limited) were liable to compensate him after he had been sued by the newly appointed personal representative of two estates for which Mr Brown had previously been the representative.
Mr Brown did not contest the action brought against him and judgement was given in favour of the estates by default. But he did contest Zurich’s refusal to cover his professional indemnity insurance claim. However, the court ruled against him on the grounds that the policy in question only covered Mr Brown whilst acting in his capacity as a solicitor. And there was no evidence to suggest that in his earlier dealings with the estates he had been offering private legal services; rather, he had been acting solely as a personal representative.
In other words, as the ruling made clear, although most professional indemnity insurance policies do provide cover on a ‘claims made’ basis, they only provide cover in relation to the specific professional activity detailed in the insured’s proposal.
Find the professional indemnity insurance you need, at highly competitive prices, at 03333 211403
In the case in question, the issue turned on whether Mr Brown’s professional indemnity insurers (Zurich Professional Limited) were liable to compensate him after he had been sued by the newly appointed personal representative of two estates for which Mr Brown had previously been the representative.
Mr Brown did not contest the action brought against him and judgement was given in favour of the estates by default. But he did contest Zurich’s refusal to cover his professional indemnity insurance claim. However, the court ruled against him on the grounds that the policy in question only covered Mr Brown whilst acting in his capacity as a solicitor. And there was no evidence to suggest that in his earlier dealings with the estates he had been offering private legal services; rather, he had been acting solely as a personal representative.
In other words, as the ruling made clear, although most professional indemnity insurance policies do provide cover on a ‘claims made’ basis, they only provide cover in relation to the specific professional activity detailed in the insured’s proposal.
Find the professional indemnity insurance you need, at highly competitive prices, at 03333 211403
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