Acrisure partner MGAM, SCOR, Aon, and the UK’s Department for Levelling Up, Housing, and Communities (DLUHC) have said that the new government-backed PI insurance scheme for EWS1 assessors is now open for purchase.
The scheme, initially announced in June 2022, is launching in response to the significant shortage of insurance companies willing to provide PI cover to firms undertaking assessments of external wall systems, commonly known as ‘EWS1 forms’, in mid-and high-rise residential buildings. The scheme is due to last for five years, from which it is anticipated that insurers will step back into the market, removing the requirement for a state-backed scheme.
Jason Anthony, CEO of MGAM Limited, said: “After winning the Government tender to develop this PI scheme for EWS1 assessors in collaboration with SCOR and DLUHC, we have made excellent progress on ensuring the product is market ready. The property market has been stalled for some time now due to this protection gap and we fully intend for this scheme to fix this issue, allowing property buyers to secure the necessary certification in order to secure a mortgage.”
A joint statement from the re/insurers and the DLUHC said that an EWS1 form is not a government or regulatory requirement, nor is it a building or life safety assessment. RICS published guidance on the criteria that should be used to determine whether a building needs an EWS1 form, which was last updated 28 January 2022 (RICS, 2022).
The original announcement of the venture said that the scheme will be delivered by MGAM through an insurance provided by SCOR, with the UK Government providing reinsurance coverage to SCOR.
Paul Scully, Minister of the DLUHC, said: “For far too long leaseholders in high rise buildings have been stuck in limbo, unable to secure mortgages on their properties, sell up and move on to their next step. It is for these leaseholders that we have launched this new indemnity scheme today and I thank our partners for helping make this a reality. This scheme will give EWS1 assessors the confidence to exercise their professional judgement, speed up the sale of flats and allow lenders to lend with confidence.”
Aon is acting as the government’s insurance advisor for the scheme.
Julie Page, CEO of Aon UK Ltd, said: “We were excited to be asked by the DLUHC to provide advisory services for the development of the PI scheme. Building this sustainable solution addresses an important protection gap in the market, and this collaborative effort, along with MGAM and SCOR, shows the power of public private partnerships. The solution itself will also help alleviate the pressure on a significant proportion of affected leaseholders who are currently unable to sell or re-mortgage their properties – and allows us to play a part in addressing issues impacting people’s lives.”
