The JFSC has issued at June 2018 the Professional indemnity insurance guidance note and cyber is a theme!!

The Jersey Financial Services Commission (JFSC) has established requirements for persons registered under the Financial Services (Jersey) Law 1998 (FSJL) in respect of Professional Indemnity Insurance (PII).

These requirements are set out in each respective Code of Practice (together, Codes) published by the JFSC for the investment business, trust company business, general insurance mediation business and fund services business sectors.

In this document the JFSC state the Board must assess the adequacy of PII arrangements

 It is imperative that the Board fully understands the scope of the PII cover applicable to the Registered Person and periodically assesses the continuing adequacy of such, especially in light of any changes to the Registered Person’s business model.

 Whilst a broker owes a duty of care to its client, it is ultimately the responsibility of the Board of the Registered Person to make PII arrangements which are commensurate with its business activities and in compliance with the requirements of the applicable Codes.

 The Codes set out prescribed minimum limits of indemnity which should be maintained by Registered Persons.

 Whilst it is the Board’s responsibility to ensure that such minimum requirements are met, the Board of the Registered Person should also satisfy itself that the limit of indemnity which is in place is adequate for its business model, and in certain circumstances this may result in additional cover being required.

 Cyber-crime is becoming more and more prevalent, and as well as establishing robust protections to guard itself against cyber-attacks, a Registered Person should also be mindful of whether or not the scope of PII cover sufficiently provides for losses or damages incurred from the loss of data/fraudulent activity related to a cyber-crime.

Consideration may need to be given by Registered Persons to the taking out of specific cyber-crime related insurance which is separate to their PII arrangements.

Should the Board be in any doubt as to the scope and adequacy of the Registered Person’s PII cover, it should immediately seek to clarify matters with its broker/insurer

 This guidance note provides comments on the following matters:

› PII policy limitations

› Obtaining PII cover

› Assessment, by the Board, of the adequacy of a Registered Person’s PII cover

› Registered Persons covered by Group PII arrangements

› Policies and procedures relating to PII

› Retroactive dates

› Characteristics of an excess

› Registered Persons carrying on more than one financial service business

› PII variances

› Transitional circumstances

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