Leading insurer ACE European Group (ACE) has welcomed proposals by Brian Holden MBE that the Pensions Regulator should make Pension Trustee liability insurance mandatory. However, ACE also stresses that although this might be a useful step forward, this is no substitute for the vital education and support needs of trustees.
Emma Watkins, ACE’s Pension Trustee Liability insurance specialist said, “Our experience in this market very much supports and reflects the comments made by Mr Holden in his report.
“Having seen the impact of claims in the industry and on individual schemes and trustees in particular, we very much support the concept of making the purchase of liability insurance mandatory, with the level of insurance being appropriate to the circumstances in question.”
This proposal was part of a comprehensive review of trustees and the future of trusteeship by Mr Holden who has over 38 years involvement in the trusteeship of occupational pension schemes and is Chairman of Trustee Risk Management Ltd. Commissioned by Professional Pensions magazine, Mr Holden’s report has already been presented to James Purnell MP, Minister of State for Pensions Reform at the Department of Work and Pensions.
In response to Mr Holden’s comment on the potential subsequent reduction in premiums, Emma Watkins says: “ACE would caution trustees that this will only happen once the market has sufficiently developed, whereupon claims trends will then drive premium figures.
“I would suggest that we need to view the purchase of insurance as one tool within a trustee's risk management toolbox - it should not in any way replace the education and support required for and by trustees. By helping to manage claims, trustees can work in partnership with insurance companies to stabilise premiums.
“ACE would of course welcome the opportunity to work with the Pensions Regulator on this as suggested in the review.”