CML welcomes new SRA decision regarding professional indemnity insurance
The Council of Mortgage Lenders recently stated that they welcomed confirmation that minimum professional indemnity insurance terms and conditions for solicitors will be in place to persist in protecting the work done on behalf of lenders.
However the CML did urge the Solicitors’ Regulation Authority to take steps to remove longer policy term uncertainty by coming to the conclusion that professional liability insurance cover for lenders should be a standard and integral part of the insurance arrangements made by solicitors.
As lenders are reliant on solicitors to take on crucial mortgage conveyancing responsibilities the CML welcomed the decision by the SRA that financial services providers will still be covered by business liability insurance minimum requirements. Without this precaution safely in place lenders would have no choice but to check the business insurance cover for each individual firm before entering into an agreement with them to undertake conveyancing work for them.
Having to do so would nearly certainly have resulted in a substantial reduction in the number of solicitor firms that lenders would be prepared to partner with. Additionally costs to consumers would have risen as well, stated the CML.
The council also welcomed the SRA’s decision to limit the length of time a firm could avail itself of the insurer of last resort known as the Assigned Risks Pool. The CML stated that they felt there was a lack of clarity in regards to which firms are currently making use of the pool despite their high-risk nature to lenders.
The council was pleased at the SRA for indicating that it will work towards ensuring that information regarding the insurance arrangements of solicitor firms be made publicly and centrally available. The CML hoped that the process will be implemented swiftly.
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