The ABI said it "backs the recommendations in the report that, for a sustainable solicitors' professional indemnity market to continue, the following changes must be made:

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  The minimum terms of the policy, as required by the SRA, must allow insurers to set premiums that more accurately reflect the risks of work carried out.
  
• The funding of the Assigned Risks Pool (for solicitors unable to get professional indemnity insurance) needs to change to provide more incentives for the profession to deal with the small number of poorly run firms by transferring the costs of the ARP more explicitly to the profession.
  
• As with other types of insurance, insurers should be able to cancel a policy if a solicitor fails to pay its premiums. At present insurers cannot do this, so firms in difficulty find it easier to stay in business, so presenting more risk to their clients. -- The single common renewal date should be scrapped

Insurance Journal

2 November 2010