Frequently Asked Questions The only change is in how your policy is arranged and administered.

As the FOA are now an introducer appointed representative of Jardine Lloyd Thompson Limited, will this change the type of cover under the scheme?

No – there is no change in the breadth of cover offered. The only change is in how your policy is arranged and administered.

Is the FOA still involved in my insurance?

Who do I direct queries to, or speak to if I have a problem?

Please contact Mr Michael O'Neill at JLT on 020 7558 3659 if you want to discuss any aspect of your cover, or if you have any queries.

Is legal defence costs cover really needed if Director’s and Officer’s liability cover is already in place?

The policy is dependent not upon whether or not an employee is a Director or Officer – a classification which can be difficult to apply with any degree of certainty – but upon whether the employee is classified by the FSA as an Approved Person.

This gives wider coverage; is specifically designed to cover regulatory risk; avoids the issues as to whether or not a particular employee is or is not an Officer of the company; and, delivers greater certainty of protection. Cover under Directors’ and Officers’ liability policies is limited to an overall collective amount whereas the policy provides limits “per individual” which cannot be eroded or exhausted by claims made by other Approved Persons.

Unlike most Directors’ and Officers’ liability policies, the scheme includes a free two-year extension to cover. This means that if an Approved Person ceases employment with his or her company through whom the cover was arranged, he or she will continue to be covered (subject to the conditions set out in question 8), at no additional cost to either the employee or the company, for a period of 2 years after cessation of employment in respect of any disciplinary process brought subsequently in connection with any act or omission which occurred during their period of employment.

Is the cover limited to any particular class or type of regulated activity?

No. All forms of normal business activity carried on by an Approved Person on behalf of his/her employer are covered, providing the employer is an FSA authorised firm.

Is it limited to business conducted in the UK?

Cover applies to any normal business activity carried out anywhere in the world, but with an exclusion of any examination or proceedings commissioned by any governmental or regulatory body in the USA. It may be possible to remove this exclusion, but at an extra cost.

What about criminal and quasi-criminal offences that fall within the jurisdiction of the FSA?

The policy has been specifically designed to cover areas of known regulatory uncertainty and risk. Hence, proceedings brought in respect of market abuse, money laundering or insider trading are specifically included in the policy, but the exclusion, in relation to proven acts or omissions of dishonesty, etc (see question 5) will still apply to this extended cover.

Does it cover acts or omissions of dishonesty?

No, save where an Approved Person has been discharged or acquitted of an accusation of dishonesty in which case he or she may make a claim for their legal defence costs to be repaid under the scheme. If their defence is unsuccessful, then, insofar as any accusation involving dishonesty is concerned, there will be no recourse against the scheme other than with the Underwriter’s consent.

May our own lawyers be used?

The scheme’s approved lawyers are Reynolds Porter Chamberlain but that will not prevent the use of a company’s or individual’s own lawyers, subject to Underwriter’s consent and no increase in cost in the conduct of the legal defence beyond that which would be incurred by the scheme’s lawyers.

Can we add or remove Approved Persons covered after they cease to be employed by the company?

Yes. Please note however that additional premium may be payable in respect of any Approved Persons added to the policy during the period of insurance. An application form for declaration of additional Approved Persons will be provided with the Evidence of Insurance certificate. As with
original applications, completed forms should be sent to Jardine Lloyd Thompson Limited who will confirm any additional premium payable. Cheques in payment should be sent to Jardine Lloyd Thompson Limited and cover will apply in respect of additional Approved Persons from the date of receipt. There will be no return of premium payable in respect of Approved Persons who leave the employment of the proposer after the date of application (see question 8).

Are Approved Persons covered after they cease to be employed by the company?

Yes. The extension runs for a period of two years but only in connection with matters arising during the course of their employment; and only where any subsequent disciplinary process does not involve proven acts/omissions of dishonesty (see question 5).

How does the employer benefit?

The Policy provides a level of protection that is designed to further the maintenance of good employment relations by addressing the regulatory risk of employees when carrying on the business of their employer. It does not, therefore, apply to any action that may be brought by an employer against an employee or by an employee against their employer. At the same time, it provides an added benefit to employers to the extent that the scheme will cover legal costs that they themselves may otherwise have to fund.

N.B. Where premiums are paid by an employer, there may be potential ‘benefit in kind’ tax implications for employees. It should be particularly noted that if any applicable tax is not accounted for in relation to the premium paid by an employer, it may be possible that it will be assessed in relation to amounts paid under any successful claim against the policy.

If employees are not FSA Approved Persons, but have been categorized to a similar standard by another regulatory body or government department, are they eligible for cover?

The Policy is essentially designed to cover FSA Approved Persons, but if an employee has been approved for his or her role by another regulatory body or government department which, when granting the alternative designation, has exercised a comparable degree of due diligence in the process, it is likely that he or she will be eligible for cover. Subject to Underwriters’ consent.