Tenet extends permanent solution to PII run-off dilemma

In what is believed to be the first commercially-available product of its kind, Tenet announced the launch of a permanent PII run-off cover policy during 2012 in the run up to RDR to support advisers leaving the industry or selling their practice.

Related topics:  Mortgages
Amy Loddington
25th March 2013
Mortgages
The solution was also offered to past members and will now be further extended to all adviser firms allowing a much greater degree of future risk mitigation.

For many years advisers have reported difficulty in obtaining run-off cover or have been faced with short term expensive solutions. And now, with a growing claims culture fuelled by claims management companies who employ blanket marketing campaigns, advisers are becoming increasingly concerned regarding legacy liability.

Aimed initially at advisers planning to retire or sell their business, Tenet will now offer the solution to all adviser firms and allow them to pay for the premium on a monthly basis, over an agreed period of time. The solution offers significant savings and a substantial reduction in risk when compared to expensive, annually-renewable options.

From last September, advisers who left the network have been able to pay a lump sum premium in return for guaranteed indefinite cover.

Keith Richards, Tenet's group distribution & development director, explained:

“Based on the average cost of an annual renewal, it is available for the equivalent of just two years’ premiums.”

“That makes it an eminently affordable alternative to renewing every 12 months and will provide complete peace-of-mind for the future, given that advisers are not protected by a longstop afforded to other professions.

“It also means that those seeking a buyer for their business can calculate the total cost of cover up-front and build it in to the overall package,” he continued.

“The key objective is to help reduce the unfair risk that exiting advisers have to shoulder, especially into retirement.

Existing firms will be able to incorporate payment of the policy within their future budgeting so as to avoid the single premium impact at the point of exit.”
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