The Association of British Insurers has recently announced it has found that the new proposals made by the Solicitors Regulation Authority in regards to professional indemnity insurance to be inadequate and could possibly lead to the worsening of fears for the market’s future.
The SRA has neglected to understand that the Assigned Risks Pool is in need of shuttering this year instead of the proposed date of October 2013, according to the ABI. The ARP is used as an insurer of last resort by solicitors who cannot secure business liability insurance from a traditional business insurance provider.
The ABI also stated they desired to see a move that would distance itself from the current minimum policy terms and conditions to one more tailored to specific levels of risk instead of a ‘one size fits all’ style.
Nick Starling, director of general insurance and health for the ABI, stated that insurers have been warning the SRA that a failure on their part to institute real changes will not only reduce consumer choice but also damage solicitors’ interests as well.
Mr Starling added that insurance providers have done as much as they could in order to deliver insurance priced at competitive levels. However without the approach of stricter capital requirements, the general insurance director stated that more from the SRA review is needed. The SRA has completely missed the opportunity for much-needed reform, he added.
The minimum terms and conditions of the SRA currently allow solicitor firms to keep their insurance cover even in the event of nonpayment of premiums. The SRA also fails to differentiate between types of law firms, whins insuranc eprovers believe the ability to vary the terms of a policy is crucial for maintaining a sustainable and stable market.