RICS consults on valuation claims concerns
by Gill Montia
Story link: RICS consults on valuation claims concerns
The Royal Institution of Chartered Surveyors (RICS) has launched a consultation on professional indemnity insurance (PII) in the UK valuation sector, where it says problems about risk and pricing are creating market dysfunction.
According to the body, the quantity and cost of handling alleged negligence claims is having a significant impact on the cost of PII, not just for firms that have received claims but for the market as a whole.
Concerns have been highlighted in a report commissioned by the RICS and input from members and stakeholders is now invited.
A three-month consultation opened on 1st December and final proposals will be put to the Government, lenders and the insurance sector early next year.
Key recommendations so far include:
RICS to work with insurers to examine whether an alternative approach to the current claim system could work, and what the impact would be on the market, valuers and the wider public.
RICS to consult government agencies and regulators to assess the impact of decreasing industry competition.
RICS to explore the option of an alternative scheme to assist with claims above a given value threshold.
RICS, valuation firms, insurers and lenders to review risk and reward levels in contracts
RICS spokesperson, Robert Peto, says: “RICS is extremely concerned about the practice of speculative claim letters being sent to property valuers on behalf of banks.”
He adds: “For this reason, a working group has been established to assess the problem and create a set of recommendations for our members and the wider public, aimed at tackling the issue.”