It’s just not getting any easier for solicitors when it comes to professional indemnity insurance. After two consecutive years of renewals pain, many small firms are once again burdened with uncertainty following yesterday’s bad news about Irish insurer Quinn Insurance.The Irish Financial Regulator (IFR) forced Quinn Insurance, part of Irish conglomerate Quinn Group, into administration yesterday because the IFR said it had concerns about Quinn’s ability to meet liabilities to policyholders. Quinn Insurance supplies more than 2,900 UK law firms with professional indemnity insurance (PII).
Other insurers and brokers have already started to pounce on Quinn policyholders and offer them alternative PII cover. But the Solicitors Regulation Authority is telling firms to sit tight, and the IFR has made it clear that UK firms covered by Quinn can still rely on their policies.
Quinn is, after all, in administration – it is not dead. While this does not remove all uncertainty from the equation, it means that more information is needed before firms make a decision on what to do next. In turn, Quinn has made some bullish statements about its financial strength, but it will take more time for administrators and the IFR to analyse the state of the company.
The SRA, it must be remembered, is not a regulator of PII insurers; although it does set rules that insurers and solicitors should follow. Whether or not insurance companies are fit to trade is a question for the Financial Services Authority in the UK, and in Ireland, the IFR. If they are deemed fit to trade, then signing a qualifying insurers agreement with the SRA is little more than a formality.
All eyes will therefore be on Quinn’s administrators and the IFR over the coming days. Unfortunately, this means that the uncertainty for many of the 2,900 firms affected will continue for the moment.