The insurance market doubts the SRA minimum rating plan can boost the solicitors’ PI market.
Doubts are growing as to whether the possible introduction of minimum rating criteria for UK solicitors’ professional indemnity insurance will attract insurers back to the class, despite surveyors’ and accountants’ PII providers being targeted as the first port of call.
The Solicitors Regulation Authority this week concluded an 8 week consultation on the proposal to introduce a minimum rating in the ‘B’ range for participating solicitors’ PI insurers, following the ongoing disruption in the class since the collapse of unrated Gibraltarian firm Lemma and the exits of Balva and Berliner from the UK market.
While some industry commentators fear the implementation of a minimum rating would leave hundreds of law firms in the lurch, the SRA hopes firms that previously exited the class, or write PI cover for other professions, could be lured to plug the gap.
According to the SRA’s consultation material, the 28 UK or European Union regulated insurers that currently write PI for surveyors and accountants in the UK, but do not participate in the solicitors’ PI market, are prime targets.
It said: “Of these, however, 12 have previously participated [in solicitors’ PI] and 5 do so through a different entity within their group. If prices and profitability of solicitors’ PI was to increase suddenly these insurers would have the capabilities necessary to enter (or re‑enter) the solicitors’ PI market.”
The SRA is currently analysing responses to the consultation, which will go before the regulator’s board ahead of publication, meaning it will be at least May before any findings are made public. Any changes following the consultation will put in place ahead of the 1 October renewal.