Administrators want no return to unprofitable business
Administrators for Quinn Insurance want to close its professional indemnity (PI) insurance business in the UK because it is not profitable, the Law Society Gazette reports.
The 2,911 law firms and sole practitioners with Quinn PI policies would not be offered renewals, and would have to seek cover from other insurers during the 2010 renewals season. All valid claims would be paid and that there would be no implications for run-off cover.
The Times quoted Frank Maher, a partner at Legal Risk, a Liverpool firm that advises other law firms, saying: “It’s going to leave a lot of firms unable to obtain any cover at all”. Alan Bannister, a regulation specialist at Vizards Wyeth, said: “It’s going to make a difficult situation even worse.”
The Times said there is talk of a new insurer looking to fill the gap — and most years someone seems to swoop in just in the nick of time to introduce new competition — but Maher reckons “it’s unlikely they are going to want to step into the breach for that many firms”.
The alternative is the assigned risks pool. After many years when there were only 20 to 30 firms in the pool, in 2008-09 there were about 140 and the present estimate is that they will generate claims of £30m to £50m worth of claims. There are now 262 firms in the pool.