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As a regulated Consumer Credit business would you like cover against the costs of an investigation by the FCA?

What is Approved Persons Insurance

On 1st April 2014 the Financial Conduct Authority took over the responsibility for the supervision of Consumer Credit in the UK. This had roughly 50,000 businesses transferred from the more relaxed regime of the Office of Fair Trading, to an organisation with more “teeth”, the rebirth of the FSA. At this time there was a lot of concern about how this change will affect consumer credit businesses, and the threat of investigations – the dreaded Section 166 Investigation – was not fully understood. Now almost 4 years later several businesses have been investigated, and the costs of such investigations can be huge.

When we realised this was a possibility, we worked with our insurance broker partners to develop a policy that would combine the benefits of a Directors and Officers insurance policy with cover against the costs of an investigation by the FCA into a consumer credit regulated business. When looking for a pure Directors and Officers policy for small consumer credit businesses we were struggling to find any, and that in itself can be a difficult position for a business to be in.

This policy does cover all the standard elements of a Directors and Officers policy, for example cover against the cost of defending an employment or health and safety claim, or the cost of claims of negligence, slander or wrongful trading. However, the real benefit for consumer credit businesses is the cover of up to £500,000 against the costs of an investigation by the FCA.

We have heard people say that their current Directors and Officers policy covers their approved persons. This is a common misunderstanding. That means a Directors and Officers policy will only treat their Approved Persons as a Director or an Officer for the risks the policy covers. There is no specific cover against any FCA related actions. This policy actually covers the costs of an investigation by the FCA into that business, as well as the standard Directors and Officers cover.

To apply for cover click here and complete the form and the underwriters will be in touch with you.

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