SRA agrees change to Qualifying Insurer’s Agreement

SRA agrees change to Qualifying Insurer’s Agreement

The Solicitors Regulation Authority (SRA) has agreed to a small change to the agreement, in order to avoid a possible administrative problem.

The change was suggested by the insurers that provide professional indemnity cover to law firms.

Several firms had contacted the SRA and the suggested amendment has now been approved by the SRA’s Board.

The situation involved a new requirement for insurance firms to declare their credit ratings when policies are renewed in the autumn.

Under the new arrangements, should an insurer’s rating change during the period of cover, it would have to inform both the SRA and also every one of the firms that had taken out a policy.

This would be quite an administrative burden and insurers asked the SRA to provide an alternative means of disclosure, which the Board has agreed to.

Any insurer that sees its rating change can satisfy the requirement to notify its insured firms if it publishes its up- to- date credit rating on its website.

The introduction of insurers disclosing their credit rating was made following a consultation on the Financial Protection Policy at the start of the year

Richard Collins, SRA Executive Director for Policy, said: "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 which is consistent with our risk-based approach to regulation.

"The phased approach should ensure a smooth transition and stability in the PII market."

The consultation on the changes to the Financial Protection can be accessed at http://www.sra.org.uk/sra/consultations/financial-protection-review.page

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