Quinn Insurance in administration

Wouldn't expect any claims on policies underwritten by this lot to be met!

So those will fall on the solicitors personally, no doubt.

It is hard to see how the SRA could require a firm to take out insurance with another Qualifying Insurer as matters stand at present. The SRA does not have power under the Solicitors Act 1974 to consider the financial standing of insurers. It does not 'approve' insurers. Authorisation and regulation of insurers is the job of the FSA and, in Ireland, the Financial Regulator, not those who regulate solicitors. The requirements to be a qualifying insurer are broadly being authorised to conduct business in the UK and entering into the Qualifying Insurers Agreement with the SRA. Quinn has satisfied both requirements. If any insurer were to go into liquidation, as happened with Independent, and I am not suggesting will happen with Quinn, then firms would have to obtain new insurance cover or go into the Assigned Risks Pool (ARP). The cover would not be backdated. Firms would be exposed to claims already made, and claims arising from circumstances already notified. Large numbers of firms going into the ARP would not only be something of an administrative issue, but could be a major disincentive for other qualifying insurers from the next renewal. We have the widest cover of any profession in the world, but perhaps the time has come to recognise that it may become unaffordable on its present terms.

Taking out a second policy of insurance now would result in double insurance (and possibly even two excesses per claim) unless the first insurer agreed to cancel, so a little care is needed. The first insurer will probably not agree to cancel if there have been any claims or circumstances notified prior to cancellation. We are probably talking about many firms who could not afford cover elsewhere or were unable even to obtain quotations.

Sorry - but Gary is not pushing his company. Even though it will be clear what side of the table I’m sitting, the very fact of the matter is Quinn always posed a huge risk to the market and the SRA should not have allowed them to be a qualifying insurer – they never had a financial rating! Experienced underwriters have been loosing money on Solicitors PI for many years but keep writing the business due to the money being used for investment purposes and when the economy is in a better position they can achieve a 80% ratio. Good old Mr Quinn managed to launch his PI at the wrong time - tried to buy in the business and didn’t realise that claims are not only common but expensive, especially when the property market collapses and the bread and butter of conveyancing for small firms disappears
The reality is no -not many insurers are anywhere near insolvent. All you have to do is look at reserve money and group assets and that fact becomes clear. A case in point AIG - we all know what happened by now but insolvency was never on the cards because, simple rules of insurance insurance, they had enough money in the pot to cover their liabilities. The new Chartis is the old AIG Uk limited and by anyone’s opinion, a strong business. And no I don’t work for Chartis

Not worth doing anything yet - but only a foolish solicitor would not be prepared as they are the ones who will face 27.5% in the Assigned risk pool and potentially go out of business - may not be a bad thing after all, as I’m sure good firms would not leave themselves that exposed!
When and if the administrators placed QIL in liquidation, speak to leading brokers, take time on the proposal form, focus and take advice on how to present your firm and… cross your fingers and hope!

Pretend things are fine - risk your livelihood.