London-based broker RFIB has launched a financial resource policy, which is led by carrier Ironshore Europe.
The policy will provide FCA regulated organisations, such as re/insurance brokers, with an “innovative, secure and capital efficient method of ensuring that they meet the financial element of FCA’s appropriate resources threshold condition,” said the company.
The regulator states that a financial institution must have sufficient capital reserves to manage its run-off should it become insolvent. The financial resource policy allows the business to free up the capital which would otherwise need to be put aside to meet the threshold condition.
In the event of a broker’s insolvency, the policy will pay for the fees of a third party provider to service the run-off. At inception of the policy the preferred provider, R&Q Insurance Services, will supply an independent quote to administer the run-off to extinction. This quote is capped, meaning that R&Q will take responsibility for the run-off from the liquidator at a price up to, but not exceeding, their quote.
Jonathan Turnbull, chief executive officer of RFIB, said: “The new regulatory environment has placed significant pressure on brokers to demonstrate that they have more than adequate capital resources. RFIB has developed and launched this product in response to the genuine need that brokers have for a secure and capital efficient alternative means of ensuring that they meet the FCA’s requirements.”
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RFIB, Ironshore Europe, Europe, FCA, Jonathan Turnbull