The Council for Licensed Conveyancers (CLC) has moved to boost its appeal to property law firms currently regulated by the Solicitors Regulation Authority by changing its arrangements for professional indemnity insurance (PII).
The plans, subject to a snap consultation lasting just two weeks, will help make a reality of what is currently a 'largely theoretical' freedom to switch regulators, stressed CLC chief executive Sheila Kumar.
The proposals involve ditching the CLC's master policy in favour of an open market in which participating insurers would undertake to provide six-year run-off cover to closing firms at no cost.
At present, firms regulated by the SRA are obliged to buy six years' run-off cover at the point of leaving the SRA regime, which serves as a powerful disincentive to switching regulators.
The SRA is presently consulting to waive this requirement for transferring firms. But the CLC said that if the obligation is retained, its own reforms will increase the ease of potential transfer between watchdogs.
The limit on claims in the six-year run-off period under the CLC plans will be £2m in aggregate, which the organisation said would be 'more than sufficient'. Brokers to the CLC master policy have confirmed that, since 2011, aggregate claims paid have not exceeded £100,000 per practice, the CLC said.
Kumar commented: '[These proposals] will bring improvements for consumers and lawyers in three main ways. PII arrangements will be more streamlined and so easier to manage for CLC practices, insurers and the CLC itself. They will improve protection for consumers and reduce the exposure of the Compensation Fund as run-off cover will be in place for all closed practices.
'Finally, they will help to make a reality of the, currently largely theoretical, freedom for firms to choose the most appropriate regulator.
'The consultation period for these changes is short because we have already consulted the current insurers of licensed conveyancers and because we want consumers and firms to benefit from the new system with effect from this spring’s PII renewal round.’