If the SEC's proposed fiduciary standard gets the thumbs up, professional liability insurance for broker-dealer reps, already up 30% over the past four years, will continue to soar. That's the expectation among insurance brokers specializing in errors and omissions insurance, which protects FINRA-registered broker-dealers and their officers, directors and employees from client lawsuits over negligence — either real or imagined.

"We would expect prices to rise initially as much as 25% if the fiduciary standard of liability replaces the current suitability standard," says John Graham, senior vice president of Aon Risk Solution's financial services practice in Chicago. Factors behind the likely premium increase include the proposed fiduciary standard's higher degree of professionalism, greater compliance obligations and expectations for higher settlement defense costs.

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