Insurance Regulation News: ABI Responds to SRA Consultation

The Association of British Insurers has submitted its response to the Solicitors Regulation Authority’s consultation ‘Protecting the users of legal services: balancing cost and access to legal services’.

The SRA has proposed changes to the requirements it sets for solicitors’ professional indemnity insurance cover, suggesting different activities require different levels of cover, and wanting to cut the minimum cover levels in all areas of legal service.

Broadly, the ABI feels the SRA has provided insufficient evidence that its proposed changes would achieve their aims of reducing premiums for solicitors or reducing the cost of legal services for consumers, given the professional indemnity market is already very competitive. Instead, the proposed changes could over-complicate the system and leave gaps in insurance coverage.

One idea the ABI does agree with is a suggestion to allow greater flexibility around cover for defence costs. In some cases introducing a cap, or an excess, could lead to genuine claims being settled more quickly and reducing pressure on premiums.

Joe Ahern, General Insurance Policy Adviser at the ABI, said:

“It’s important both solicitors and their customers can be confident they have the right legal and financial protections in place.  The minimum standards for professional indemnity insurance set out by the SRA at the moment are working well as part of a competitive market. We are urging the SRA not to over-complicate the system and expose some customers to unnecessary risk by reducing these mandatory limits.”

The ABI’s full response can be found here.

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