Legal body would replace pool with an extended renewal period
The Law Society has backed calls from insurers to scrap the assigned risks pool (ARP) and has drawn up alternative plans for law firms unable to get professional indemnity (PI) cover.
In its response to a Solicitors Regulation Authority (SRA) consultation paper on proposed changes to the PI market, the Law Society suggests closing the ARP and replacing it with an extended renewal period (ERP).
The plans would make insurers give firms at least three months cover from the end of their existing PI policies, in order to find cover or make plans for mergers, succession or run-off.
A spokesman for the ABI said it had been in talks with the Law Society but wanted further details to make sure the plans were workable.
The SRA wants to cut the time a law firm can stay in the ARP from 12 months to six months from 1 October 2011. From 2012, the SRA has suggested limiting the ARP’s role to protecting clients of law firms that do not have PI.
Zurich legal professions manager Jenny Screech said: “It seems that the market, the SRA and the Law Society are on the same page to the extent that the ARP must change.”
UIB divisional director Simon Lovat said: “Making the insurance industry act like a market and applying good governance is what cures this problem, not changing an ARP to an ERP. Don’t keep pushing regulation onto the insurance industry – that’s not its job.”