The Board of the Solicitors Regulation Authority (SRA) has decided to make a number of changes to its Financial Protection Policy, as part of its annual review process.
The Board met on Wednesday 16 May, when it agreed to make changes to the Qualifying Insurer’s Agreement and to the rules within the Client Protection section of the SRA Handbook. The changes are needed to ensure that the open-market system of PII is sustainable and competitive for the foreseeable future. It is proposed that the changes will be implemented in October 2012.
Antony Townsend, SRA Chief Executive commented:
“As a public interest regulator, our objective is to ensure that we have a comprehensive set of arrangements to protect clients through compulsory Professional Indemnity Insurance and the SRA’s Compensation Fund. We believe the proposed changes to the Financial Protection Policy will secure that position.
“We had a good response to the latest consultation on the policy, and adjusted our proposals in response to some of the comments.”
The consultation looked at the changes proposed as part of the April 2011 Policy Statement, which can be accessed here. It ran for 12 weeks until 17 January.
The main proposed changes were:
– The closure of the Assigned-Risks Pool as a provider of policies of qualifying insurance from September 2013. This is with the exception of run-off cover started before September 2013
– The requirement that from October 2012 all policies of qualifying insurance make provision for an extension of 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 come into force in October 2013 to control the work undertaken by firms during that 90 day period, and to remove authorisation at the end of the 90 day period if no new policy of qualifying insurance is taken out
– Provisions for the funding of the ARP in 2012/13 to be funded by both the regulated community and the qualifying insurers
– Provisions to move the responsibility for making payments in respect of uninsured firms from the ARP to the Compensation Fund in 2012/13
– Requirement for the qualifying insurers to submit their credit ratings to the SRA, for publishing on the SRA website, and to include such ratings in quotation documents
Numerous stakeholders submitted comments and views during the consultation process. These views, along with the SRA responses are available here.
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