Irish Central Bank fines firms without professional indemnity insurance

SIX financial services firms have been sanctioned by the Central Bank for failing to hold professional indemnity insurance, as part of a crackdown to ensure compliance.

The companies sanctioned were Campbell Financial Services, MOD Financial Services, Central Motors, Rocklands Financial, Ryan Motor Power and Redmond & Associates.

While the sanctions were all relatively small -- under €1,000 -- they represent a new emphasis by the regulator on this behaviour.

"By taking this action we aim to ensure that consumers who avail of financial services from insurance intermediaries are provided with the same level of protections from all firms within industry," it said.

Professional indemnity insurance covers loss suffered by customers from professional negligence. It is based on the concept that professionals owe a duty to show reasonable care and skill when they provide a service to someone. If someone fails to exercise this duty they may be liable for losses incurred by their client, or third parties. Professional indemnity insurance covers the consequences of this.

Insurance brokers, lawyers and other types of financial services practitioners are required by law to maintain it.

Last year the Central Bank launched a campaign of themed inspections to try to improve compliance with this insurance requirement, targeting firms who were non-compliant in terms of submitting annual returns and the payment of levies.

Source: Irish Independent