The Association of British Insurers has expressed their approval of the findings of a recently published report that details the changes needed to the professional indemnity insurance market for solicitors.
The report states that the solicitors business insurance market has reaped the benefits of £2.1 billion in savings after it moved to an open market ten years ago. Charles Rivers Associates conducted the report at the behest of the Solicitors’ Regulatory Authority.
The ABI was enthusiastic in its backing of several recommendations detailed in the business liability insurance report by Charles Rivers Associates.
One such recommendation was that insurers must be allowed adjust premiums that reflect the inherent risks carried out by such work in a more accurate manner, as stated by the minimum terms of the policy.
Additionally, the ABI agreed with a proposed change to the Assigned Risks Pool. An overhaul was suggested for the funding methods of the ARP, which is used by solicitors who cannot secure professional indemnity insurance cover. The study recommended the addition of incentives for solicitors to more effectively manage poorly run law firms by making the profession in general more directly responsible for the costs associated with the ARP.
One more recommendation the ABI welcomed was that of giving professional indemnity insurance providers the ability to cancel policies in the event that solicitors neglect to pay their premiums.
Also, the ABI agreed with the study that there should be an abolition of a single common renewal date.
Kate Carr, assistant director of markets and regulation for the ABI, commented on the study’s findings by saying the professional indemnity market is extremely intolerant of periodic crisis. When such crises are precipitated by both restrictive policy requirements and poorly enforced regulation, Ms Carr continued, ABI hopes the legal profession will take the report’s findings to heart in order to bring sustainability and stability back into the PI insurance market.