News releases

Final Professional Indemnity Insurance figures

The Solicitors Regulation Authority has revealed the final details of the compulsory Professional Indemnity Insurance (PII) arrangements of firms in England & Wales for 2011/12.

PII ensures that client claims in respect of negligence or, in certain circumstances, dishonesty can be met. The 10,917 practices operating in England & Wales have secured qualifying insurance with a total premium income of £255.7 million.

Estimated premium income written by Qualifying Insurers for the 2011/2012 Indemnity Period.

Qualifying Insurer Initial Participation 2011-12
Allianz Global Corporate & Specialty AG 5.773%
Alpha Insurance 3.363%
Aviva Insurance Limited (prev Norwich Union) 3.333%
Barbican Syndicate 1955 C/O Libra 3.495%
Chartis Insurance (UK) Ltd (formerly AIG) 8.870%
Chubb Insurance Company of Europe SE 0.342%
Enterprise Insurance Company PLC 1.145%
European Risk Insurance Company (E.R.I.C.) 3.260%
First Title Insurance PLC 1.075%
International Insurance Company of Hannover 12.514%
Lemma Europe Ins Co Ltd 0.000%
Liberty Mutual Insurance Europe Limited 1.333%
Pembroke Syndicate 4000 0.159%
QBE D A Constable Syndicate 386 1.714%
QBE International Insurance Limited 11.782%
Royal & SunAlliance Insurance PLC 1.073%
Travelers Insurance Co Ltd 11.602%
W. R. Berkley Insurance (Europe) Limited 1.467%
XL Insurance Ltd 18.288%
Zurich Insurance PLC 9.411%

A total of 32 firms failed to find PII on the open market and entered the Assigned Risks Pool (ARP).

Antony Townsend, Chief Executive, said: "During consultation on our financial protection arrangements, we found that one of the biggest challenges facing us was the need to manage down the number of firms in the Assigned Risks Pool (ARP), which was placing a burden upon other firms and inhibiting a competitive market for PII. Therefore, we announced measures to address this as part of the key changes to the arrangements for client financial protection in April.

"These figures demonstrate that our programme of reforms is having the intended effect. We continue to monitor the effect of these changes not only upon firms in the ARP, but also small firms who are particularly vulnerable to increases in insurance premiums."

With effect from October 2011, the amount of time a firm can remain in the Assigned Risks Pool has been reduced from 12 to six months.

The SRA is currently consulting on the implementation of a number of the policy decisions announced in April. These include:

  • the closing of the Assigned Risks Pool (ARP) as a provider of policies of qualifying insurance from 30 September 2013 (with the exception of the continued provision of run-off cover incepted before that date)
  • a requirement, from October 2012, that all policies of qualifying insurance make provision for extension by 90 days at the end of the insurance period if the insured firm has not taken out a new policy of qualifying insurance
  • changes to Authorisation Rules to control the work that may be undertaken by firms during that 90-day period
  • provisions for the funding of the ARP in 2012/13 to be provided by both the regulated community and the qualifying insurers
  • provisions to move responsibility for making payments in respect of uninsured firms from the ARP to the Compensation Fund in 2012/13

Details of the consultation exercise appear on the SRA's website at www.sra.org.uk/consultations/.

Capita is responsible for collecting the ARP premium on behalf of the SRA. As of 21 September, the total of outstanding premiums for 2010/11 was £7.6m. Capita continues to pursue unpaid premiums vigorously, and this includes the issuing of statutory demands.

The SRA is also taking disciplinary action in relation to the unpaid premiums. The principles of 39 firms have this year been referred to the SDT for failure to pay ARP premiums.  

 
Print page to PDF