Everyone out of the Pool: ARP closes in 2013, insists SRA

With the Solicitors’ Regulation Authority closing the Assigned Risks Pool in 2013, many entrants into the solicitors’ professional indemnity insurance market have begun attempts to exploit this timing.

The solicitors’ professional liability insurance sector has been grappling with the uncertainties of reform as the 2011-2012 renewal deadline rapidly approaches.  The SRA announced the new reforms earlier this year in April, leading many business liability insurance providers, such as Chartis and Zurich, to criticise the decision.

Calling these reforms ‘too little too late,’ both insurers claimed that the changes would only lead to many smaller solicitor firms to have no choice but to close their doors.  The closing of the ARP in 2013 has spurred some insurers to action, who allegedly exploited a loophole that would have permitted it to avoid taking on its share of firms within the Pool, though the loophole has since been closed.

Clear Insurance Management’s professional risks director, Daniel Innes, praised the swift action on the SRA, stating that insurance providers should play fair.  Mr Innes expressed his gratitude towards the SRA for dealing so promptly with this behaviour, as it would otherwise force the market in the wrong direction and result in insurers such as Travelers and Chartis from bearing the brunt of the damage.

However, such actions as the attempt to shirk their duties in regards to the ARP were called evidence of an aggressive streak of some of the newer industry entrants, experts said.  A significant percentage of insurance providers, while clearly wishing to increase their market share, have no desire to be bogged down with the issues that have plagued the long time professional indemnity insurance providers, these experts added.

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