Writing in the Gazette a fortnight ago, SRA board chair Charles Plant (pictured) signalled his determination to combat the perception that the regulator somehow ‘has it in’ for small firms. This was no platitude, as the organisation’s plans to slash mandatory PII cover and simplify compliance with accounting rules demonstrate.
In accordance with this newly reasserted aversion to prescription, the SRA has also chosen not to ban unrated insurers.
Though the single renewal date is now officially defunct, it is significant that the regulator has indicated the reforms are intended to take effect by 1 October. Just 400 firms have moved off it so far. What the regulator cannot do is cut premiums – that is up to the market. The insurance industry is looked upon with a jaundiced eye by solicitors and the early consensus at press time was that cuts are not a given.
We must hope that pessimism is misplaced. Solicitor insurers are numerous enough to be motivated to compete more keenly on price, particularly given that the unrated companies remain in the game.
Another ‘known unknown’ is the extent to which clients will seek to negotiate differential insurance rates, which could have the unintended consequence of creating more bureaucracy.
For now though, the regulator deserves credit for responding so boldly to its critics.