The Solicitors Indemnity Mutual Insurance Association (SIMIA) has gone into run-off.
SIMIA’s members voted to run off the mutual after its worsening claims experience hiked premium costs.
The mutual provided solicitors’ professional indemnity (PI) insurance for around 150 law firms.
SIMIA wrote around £11m of premium in an average year and about £7m of premium from the 2010 renewal to March 2011.
The mutual was run as a not-for-profit insurer that gave its members a discount on their premiums.
A SIMIA spokesman said: “We had come to a position where our premium was going to be insufficient to pay our claims.
“The soft market meant there was no advantage in premium costs to members, no financial benefit.”
The mutual was formed in 1986 to provide cheaper insurance to its members and to inject capacity into the solicitors’ PI market.
The spokesman added: “This market is awash with capacity now.”
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