Zurich concerned over SRA lack of PI insurance changes

After the Solicitors Regulation Authority’s recently unveiled changes revealed that it will not be addressing marketplace challenges for smaller firms renewing professional indemnity insurance, one provider of business insurance has expressed their concern.

The changes the SRA announced include a reduction in the amount of time a solicitor firm would be permitted in the Assigned Risks Pool to 6 months, down from 12.  The new measure goes into effect in October of this year.

Two years after that date and the entire pool will be replaced with a new system that will have insurers offer an extended professional liability insurance period for three months to protect firms unable to obtain cover otherwise.

Zurich recently pointed out that the SRA undertook a solicitors’ professional indemnity review in 2010 in response to mounting fears concerning the rising number of losses that  ARP-insured firms were suffering. The need for swift and significant change was then highlighted by a comprehensive report filed by Charles River & Associates.

Jenny Screech, UKGI legal professions manager for Zurich, stated that the firm is concerned.  Despite the report’s findings, the SRA has lacked the swift movement needed on implementing practical and reasonable change proposals, Ms Screech said.

The marketplace in general has been working quite diligently for some months in order to engage with both the Law Society and the SRA in its efforts to reach a solution that would create more certainty and stability for the profession, added Ms Screech.

In conclusion the legal professions manager stated that Zurich acknowledges that  the SRA is proposing changes for 2012 onwards.  However this could simply be too late for many firms, as the lack of change in 2011 may nearly certainly pave the way to another highly difficult renewal period for solicitor firms, Ms Screech added.

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