The Securities Authority promotes group professional insurance to portfolio managers


Due to the ongoing difficulty of companies managing investment portfolios of the general public to find professional insurance as they are required to do, publishes today ISA “Voice calls for group insurance for portfolio management companies.” In this context, the Securities Authority asks insurance companies, insurance agents and insurance brokers how they think it will be possible to create a group policy for portfolio managers, which will provide an insurance solution for a group of portfolio managers.

Why is the Securities Authority headed by the chairman looking for Anat Guetta To create group insurance for portfolio managers? The Securities Authority explains that “portfolio management companies are required by law to purchase professional insurance policies in order to protect the investing public that receives their services,” however, “the increase in insurance policies in recent years is a significant burden on the portfolio management and executives industry. The cases in particular. “

The Securities Authority claims that this increase occurred “despite the small number of claims actually filed in the field,” but that this is an insurance field that is heavily influenced by international trends and relies heavily on reinsurance. Thus, the trend of an increase in claims in such insurances, along with a considerable increase in the financial volume of these claims, causes these insurances to increase in Israel as well, while leaving the field of some of the insurance companies operating in the field.

In any case, for quite a few portfolio managers, this is a real obstacle, with the insurance prices required of them rising, and sometimes they even have difficulty finding the full insurance coverage they want. Therefore, the Authority is now calling on “the relevant parties in the field of insurance” to ask questions “Proposals and examine a model of group insurance, in which one insurer or several insurers, will prepare an insurance policy for a group of joint portfolio management companies.”

The Securities Authority proposes that such group insurance be such that “any portfolio management company can claim the insurance policy up to the minimum amount it is required to insure according to the insurance regulations, as long as there is an insured balance that has not yet been claimed by other companies in the group policy.”

The Authority in charge of portfolio managers hopes that “the total amount insured in the group policy will be lower than the total coverage of all companies that would be covered by the group policy if they had taken out the insurance separately, assuming that a significant reduction in the insured amount.” To a considerable extent. ” The Authority also states that they are currently promoting an initiative to amend legislation on the subject, which will allow relief for portfolio managers in the context of insurance requirements.

As of the end of March this year, the volume of portfolios managed in Israel was about NIS 260 billion. At the end of 2019, there were 123 management companies in the managed portfolio market, of which 19 were “large” companies (which today or in recent years have over a thousand customers or NIS 5 billion in managed assets).

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