Assigned Risk Pool applications low
The SRA has reported the number of applications from solicitors firms looking to enter the Assigned Risks Pool (ARP) is lower than in previous years.
This will be the final year for the scheme which provides Professional Indemnity Insurance (PII) for firms that have failed to secure cover on the open market.
The pool is being phased out as part of measures to help protect clients and increase the competitiveness of the market.
28 firms have applied so far to go into the ARP since the renewal date of October 1.
On October 4 last year, 53 firms had applied. This compares to 411 in 2010, before the SRA enhanced its policy.
Liability for claims arising from firms who have not taken out insurance will move from the ARP to the Compensation Fund.
Richard Collins, SRA Executive Director for Policy said: "It was clear that to ensure the long-term sustainability of the PII arrangements that one of our biggest challenges would be to address the ARP.
“Doing this was complex, but we believe the arrangements approved and being implemented offer the best way of ensuring client protection through a competitive insurance market.
"The changes we have introduced will ensure firms have PII in place that provides the required level of consumer protection within a sustainable market for the long term, by creating a competitive and open insurance market.”
In October 2013, the ARP will stop providing qualifying insurance and be replaced with a system where insurers offer a three-month extended policy to firms which cannot obtain PII for the following year.
A firm may continue to practise while attempting to obtain a policy for the first 30 days of this extended indemnity period.
For the remaining 60 days – the Cessation Period – firms may only work on existing instructions while attempting to find insurance, or conduct an orderly closure in the case that insurance is not obtained.
The SRA will be carefully monitoring the effect the changes have and systems in place to check where firms are experiencing problems.
Further information on the SRA and PII is available at http://www.sra.org.uk/indemnity/