All life insurance companies have included in their agency agreements with advisers that they must have professional indemnity insurance. Now that NZI has said it will not offer PI to firms with three or less advisers the majority of advisers will be unable to comply with their agency agreements.0

Partners Life is the only company which has been willing to speak the issue. Managing director Naomi Ballantyne having the PI clause in the agreements has worked well.

Insurance companies wanted PI cover in agency agreements because "it's what you do when you run a life insurance business", she said.

It gave customers a recourse against an adviser if something went wrong. She says essentially advisers were buying insurance to protect their customers.

"It's worked very well."

Folllowing NZI's decision Partners Life is rethinking what it does in the area and seeing if there are any other ways it can help advisers or if there is another structure they could use.

She said NZI's decision may force advisers to join bigger groups.

Meanwhile, NZI have finally provided a comment on their decision not to offer PI cover to the bulk of the market.

In a statement it said: "We have nothing further to add at this time - our underwriting position is constantly under review, balancing our partner and customer needs in line with current and future regulatory requirements."