Feeling festive yet? 

Each year, as the clock ticks down to ValidPath's Christmas Break, it always feels as if we are in the final stages of an especially arduous marathon.   This is because the festive season coincides with our annual PII renewal, an exercise of such monumental proportions, that I now spend weeks in training prior to it, and even more weeks in counselling afterwards.  Each year, we complete the process in a state of triumphant exhaustion - yes!  we've managed to nail it all down.  We promise ourselves that next year, it's going to be so much easier to manage - and then (of course) next year the goalposts all shift, and the Underwriter requires even more granular data to help them price the risks attached to the latest FCA overreach.

IMG 1894

Our process in this respect is important.  We do still try to gather and validate as much data centrally as we possibly can, without bothering our Members any more than we really have to.  Unfortunately, in respect of this particular exercise, the 'really having to' aspect seems to be increasing over the years, largely because it is impractical to attempt to pre-emptively enhance our systems prior to the event:  the role of the Regulated is to dance like marionettes on strings which are jerked erratically and unpredictably by the Regulator.  The 'best guess' gets you only so far, and what turns up in next year's PII renewal proposal is a bit like re-reading Tolkien's Lord of the Rings and discovering for the first time The Return of the King.

Our approach is to create bespoke supplementary questionnaires, relating to specific areas of business - which at least means that our Members need only to complete those that are relevant to them.  Every single return is then printed out, bound (see above), and carefully reviewed, prior to the careful construction of the compilation of the relevant data.  That then supplies the totals, averages and other benchmarks so beloved of the Underwriter - as well as the granular data which feeds into the bigger picture.  Everything is checked and double-checked, because we are driven by the belief that the quality of our data is paramount.  Drawing sane, proportionate conclusions from it is pretty important too.

So, from a festive perspective, you can see that the dysfunctional interaction between the FCA and the PII marketplace is the gift that keeps on giving.  Cumulatively, the sequence of events which culminate in the completion of our PII renewal takes around a month each year, which seems a disproportionate investment of time and resources for a facility which has not paid out on a single claim over the last decade, largely due to the accretion of exclusions, each one of which has been a direct response of the Underwriters to the latest regulatory novelty.  Well, at least our no-claims record looks impressive.

And, just in case you are not yet sufficiently full of cheer, news is breaking that the FOS is proposing to double its levies, and hike the individual case fees to £650 in 2020.  One might wish that Greta Thunberg might turn her pungent effectiveness on the sheer unsustainability of this model of regulation, rather than limit her talents to such a secondary issue as climate-change!  And that, for the politically-correct, was an attempt at humour - which leads me in a more positive direction.  ValidPath's new, market-leading practice-management system places us in a far better position to manage risk, and optimise the outcomes for both Advisers and their clients.


Kevin Moss, 18/12/2019