Does your Professional Indemnity policy cover PSD2?
PSD2 is an update to the EU's Payment Services Directive. It applies to a broad range of Fintech activities and businesses, including AISPs (Account Information Service Providers) and PISPs (Payment Initiation Service Providers). PSD2 is enforced in the UK by the FCA.
Currently, only a minority of UK insurers are providing insurance that complies with PSD2 regulation, Payment Services Regulation 2017. To review your existing cover, or get a free quotation for Professional Indemnity insurance which does comply with PSD2, click here.
What am I required to insure?
Here are a few of the liabilities PSD2 requires you to insure:
- Payment service provider’s liability for unauthorised payment transactions (Article 73)
- Payment service providers’ liability for non-execution, defective or late execution of payment transactions (Article 89)
- Liability in the case of payment initiation services for non-execution, defective or late execution of payment transactions (Article 90)
- Right of Recourse (Where the liability of a payment service provider under Articles 73 and 89 is attributable to another payment service provider or to an intermediary, that payment service provider or intermediary shall compensate the first payment service provider for any losses incurred or sums paid under Articles 73 and 89.)
Full guidelines of your liability are available on the FCA website, but you can also talk to one of our expert insurers - click here for a free quotation.
How should I get cover in place?
Talk to your compliance department/your consultants about what policy limit will satisfy your firm's obligations. Insurance limit and excess levels are specified by PSD2 and calculation criteria are provided by the EBA.
- Directive should have been initiated by 13th January 2018
- Firms can apply to be authorised or registered under the PSRs 2017, or the Electronic Money Regulations (EMRs) as amended by the PSRs 2017
Work with an A-rated international insurer. Be sure their finances are rock solid, and that they're experts in the fintech sector, and know your legal obligations inside out.
La Playa is a Fintech insurance specialist - we offer free, no obligation quotations and expert advice - just click here.
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Does PSD2 affect my business?
According to the FCA, PSD2 is relevant for firms who are currently FCA authorised, as well as firms seeking authorisation. This includes:
- All existing payment service providers (PSPs), including banks, building societies, credit card providers, money remitters and e-money issuers.
- A range of firms that are not currently required to be FCA-authorised or regulated, including firms that:
- provide services that are currently exempt from regulation because of the limited network, ‘digital download’ or commercial agent exemptions
- provide, or plan to provide, account information and/or payment initiation services
If you're in any doubt over your professional indemnity insurance and its PSD2 compliance, we'd be happy to review your existing cover. Click here for an expert quotation.
