News releases

SRA reveals solicitors' insurance figures

Insurers have underwritten nearly £240 million worth of business for solicitors in England and Wales, the Solicitors Regulation Authority (SRA) has revealed.

Figures for the 2012/13 Professional Indemnity Insurance year have been collated following renewals that that needed to be completed by the end of September. A total of 22 insurers from the SRA's Qualifying Insurer list have secured business.

The largest share of the market has been taken by XL Insurance Ltd with 16.5 per cent of the total business underwritten. Second are Travelers Insurance and QBE International with 10.9 per cent.

This year marks the last in which the SRA will operate the Assigned Risks Pool (ARP) for those firms that cannot secure insurance on the open market. This "insurer of last resort" is being stopped as part of a raft of measures the SRA put in place to further protect clients and increase the competitiveness of the market, the pool is being phased out, and 2012 is the last year such cover will be in place.

To date, there are 20 firms in the ARP.

Richard Collins, SRA Executive Director for Policy, said: "It was clear that to ensure the long-term sustainability of the PII arrangements that one of our biggest challenges would be to address the ARP. Doing this was complex, but we believe the arrangements offer the best way of ensuring client protection through a competitive insurance market.

"The changes ensure firms have PII in place that provides the required level of consumer protection. We have also ensuring there is a sustainable market for the long term by creating a competitive and open insurance market. We have implemented this in a phased way over a number of years to ensure a smooth transition and maintain stability.

"We will be carefully monitoring the effect these changes have. We have also put new systems in place for insurers to alert us at an early stage where firms are experiencing problems. This means we can provide early support to firms, and where necessary, protect consumers from a sudden and disorderly closure."

In October 2013, the ARP will be replaced with a system where insurers offer a three-month extended policy to firms which cannot obtain PII for the following year. A firm may continue to practise while attempting to obtain a policy for the first 30 days of this extended indemnity period.

For the remaining 60 days - the Cessation Period - firms may only work on existing instructions while attempting to find insurance, or conduct an orderly closure in the case that insurance is not obtained.

The total share among those on the SRA's Qualified Insurer List can be found here:

More on the share of PII insurance

 
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