SRA Update
Professional indemnity overhaul
SRA Update Issue 11 – December 2009
We are proposing radical changes to the Assigned Risks Pool—along with a change to the definition of "successor practice" that would affect firms contemplating closure. Help to shape SRA policy by taking part in consultations open now.
We are proposing three options for change to the Assigned Risks Pool (ARP)—to take effect from 1 October 2010 . The second and third fall options away if the first is adopted.
The first option is that firms will no longer be able to enter the ARP, but firms in the ARP on 30 September 2010 would be entitled to remain in the ARP until they cease to be eligible.
The second proposal is that new firms will not be eligible for an ARP policy. The third is that the maximum time for any firm in the ARP will be reduced from two years to one.
SRA Chair Peter Williamson recently wrote about the proposals. Regardless of the ARP option implemented, he said, it is clear that many firms are having trouble closing down in an orderly fashion: "There is a strong case for making mergers and acquisitions more attractive, so the SRA is… consulting on whether the definition of a successor practice can be made more flexible."