Solicitors Regulation Authority (SRA) says brokers won't need to remarket Quinn policies
Brokers handling Quinn professional indemnity insurance for their solicitors clients will not need to rebroke the policies.
The Solicitors Regulation Authority (SRA) currently has faith that Quinn will continue to pay out on claims until October, when the renewals begin.
There had been fears that the SRA would ask brokers to remarket the policies because of Quinn’s insolvency.
A spokeswoman said the situation could change depending on updated information.
An SRA spokeswoman said: “The SRA understands that existing policy holders of Quinn in the UK will continue to be covered, and that customers of the firm can continue to make claims in the normal way. We are seeking confirmation of this. In the meantime, we are advising firms to take no action at present. We will contact all policy-holders direct if the situation changes, and we will put information on our website.”
Quinn took a £23.7m share of the market last year, making it the fifth biggest player in solicitors PI.
A Marsh spokesman said: “Following reports that the Irish High Court has appointed provisional administrators to Quinn Insurance, law firms insured by Quinn will be awaiting advice from the Solicitors’ Regulatory Authority about the impact this announcement will have on their PI cover.
"Regardless of whether impacted law firms have to find replacement cover or not, they should be seeking expert advice around their PI coverage from a trusted insurance broker as soon as possible. Since Quinn’s UK branch is now closed to new business, an already hard insurance market for small law firms is certain to become much tighter.”
Neil Nimmo, executive chairman of Lockton Risk Solutions, said: "Lockton UK has not placed any solicitors’ Professional Indemnity Insurance with Quinn because they failed to meet Lockton’s minimum credit criteria. It is clearly too soon to state with absolute certainty how this development will affect the UK solicitors insurance market but we can say that Lockton is already in negotiations with a few high quality insurers to find alternative solutions for those firms that have been caught up in this financial crisis.
"Lockton is committed to providing quality long term solutions for its law firms and we have consistently voiced our concerns that small brokers have been selling unrated security to clients in such a volatile legal environment.
"2,911 law firms will be left stranded by this disaster, which will cause added challenges in this sector of the insurance market, which is already assuming heavy losses.
"Clearly this will also raise further concerns about the Assigned Risk Pool and its future.
"Lockton will be providing more in-depth updates and potential solutions as the situation unfolds."