SRA eases insurers’ disclosure rules
Professional indemnity insurers will not be required to tell solicitors if their credit rating changes during the year of cover, regulators have decided.
Following lobbying from the insurance industry, the Solicitors Regulation Authority has eased rules regarding insurers’ disclosure. Under the Qualifying Insurer’s Agreement approved earlier this year, each insurance firm must now tell the SRA and each client their credit rating.
But it was agreed at last week’s SRA board meeting that informing individual law firms if that rating changed during the indemnity period would be too onerous. Instead, insurers will only have to keep the regulator updated during the year.
Meanwhile, the Law Society has urged its members to demand to know what commission is taken by brokers securing them professional indemnity insurance. The European Commission has proposed to require mandatory disclosure of commissions for all insurance intermediaries.
But the Society reminded solicitors that indemnity insurance brokers are already required to reveal such figures under Financial Services Authority rules.
Law Society head of regulation Elliott Vigar said: ‘By requesting information now from brokers on their total remuneration, including commission, our members can go into the PII renewal period with a clear picture of what is on offer and make the right decisions based on having all that information to hand.
‘There is no sensible argument for brokers’ commissions to be kept secret.’
The Society has campaigned for more disclosure from brokers and has produced a Buyers’ Guide to help its members better understand insurance relationships.