Capita issues shock cash call for insurers to pay for a backlog of solicitors' professional indemnity claims
Qualifying insurers have been ordered to pay more than £38m in professional indemnity claims for the solicitors’ assigned risks pool (ARP), Insurance Times has learnt.
The £38.6m cash call was made by Capita, which is responsible for auditing insurers on behalf of the Solicitors Regulation Authority.
The figure covers claims as far back as 2005. Insurers were hit by a £17.5m bill for the 2008-2009 year alone. The bill for 2010-2011 runs at £3m already.
The cost will be divided up between insurers according to their share of the solicitors' PI market.
An industry source said: "They havent got enough premium to pay the claims that have come in already on this current year. It's definitely not going to get any better."
The current Capita bill dwarfs earlier cash calls, such as the £16m figure that hit qualifying insurers in January 2010.
A Capita spokesman confirmed the £38.6m figure, and added: "Capita manage the assigned risks pool on behalf of the qualifying insurers and make cash calls from time to time as required."
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