SRA’s enforcement action on ARP shows results
Today’s Conveyancer welcomes the stricter policies the SRA is taking to remove firms from the market that are unable to work themselves out of the ARP. The SRA has claimed that its strategy to manage the Assigned Risks Pool (ARP) more effectively is starting to show results, with firms paying up over £3/4 million of outstanding premiums and 47 firms either closed or in the process of closing.
The number of firms who have made applications to the ARP this year is fewer than last year. There had been 418 applications to 7 October 2010, compared to 428 at the same time last year. Of these, 22 have already found insurance cover on the open market since 1 October, so will not be in the ARP. Others are likely to do so over the coming weeks.
The SRA has changed its policy so that firms may be in the ARP for 12 months maximum, rather than the two years which was previously allowed. Firms who have not managed to find insurance by the 1st October have a further 4 weeks to find backdated insurance. However, although some of the outstanding premiums have been paid, there are still millions of pounds-worth due. All firms in the pool will receive visits from the SRA and there will be an immediate focus on the prompt payment of premiums. The SRA says that this approach will continue for 2010/11. It is already identifying for early investigation all firms that have entered the 2010/11 ARP that pose a high regulatory risk.
SRA Chief Operating Officer Mike Jeacock said: "In August we launched an enforcement strategy for firms in the ARP. All firms have received visits and advice, and action is being taken against those posing an unacceptable risk or failing to pay their premiums. Our strategy is proving a success – since August we have collected over £750,000 of outstanding premiums, 37 firms have closed and a further 10 are in the process of closing. We are monitoring these closely.”
No conveyancer would wish to be in a situation where they are unable to obtain insurance and are therefore in the ARP however firms with high claims records must be excluded from the profession.