ABI director says SRA proposals don't go far enough
The ABI has warned that the Solicitors Regulatory Authority (SRA) proposals published today on the reform of the solicitors’ professional indemnity insurance may not bring about a solid and sustainable market.
The SRA consultation proposes a two-stage introduction of changes, with some to be made in time for the October 2011 renewals and others to be implemented in 2012 or later.
An ABI spokesman said the body welcomed the proposal to exclude financial institutions from the minimum terms, and also welcomed the limit to the reduced time solicitors’ practices can spend in the assigned risks pool (ARP).
The ABI spokesman said the body was concerned about some issues, such as:
• The operation and funding of the ARP. The ABI said it wais crucial that the way this is funded is addressed, to give some predictability on future costs, as over the last three years nearly 800 firms have amassed losses of £65 million.
• The ability of insurers to void policies for non-payment of premiums and misrepresentation or non disclosure.
• Ensuring that run-off provisions in the policy are fair and do not allow the public to be put at risk by allowing incompetent or dishonest solicitors to continue practising
Nick Starling, director of general insurance and health at the ABI, said: “These proposals need to go further if we are to build a stable and sustainable market for solicitors’ indemnity insurance.
“With the market facing its third major crisis in the last twenty five years, the regulator must grasp this opportunity and act decisively to deliver much-needed reforms that will encourage insurers back into this market.
“In the coming months we will be discussing these proposals with the SRA and our members to push for effective action to bring greater certainty and stability to this market for insurers and solicitors alike.”