Nearly 50 law firms in the assigned risks pool (ARP) have closed or will soon close as a result of enforcement action by the Solicitors Regulation Authority, the regulator said today.

The SRA said that 37 ARP firms have closed and 10 are in the process of closing, and it has recouped more than £750,000 of unpaid premiums, as a result of its crackdown on ARP firms announced in August.

As of today, 418 firms have applied to enter the ARP since this year’s 1 October professional indemnity insurance deadline, compared with 428 at the same stage in 2009. The SRA said that, of these 418 firms, 22 have found insurance cover on the open market since 1 October, and will not enter the ARP.

Firms can put in a protective application to the ARP, and have four weeks’ grace within which to find cover on the open market. The ARP is the mutual insurer of last resort for firms that fail to find professional indemnity insurance (PII) cover in the open market.

SRA chief operating officer Mike Jeacock said: ‘In August we launched an enforcement strategy for firms in the ARP. All firms have received visits and advice, and action is being taken against those posing an unacceptable risk or failing to pay their premiums.

‘Our strategy is proving a success – since August we have collected over £750,000 of outstanding premiums, 37 firms have closed and a further 10 are in the process of closing. We are monitoring these closely.’

The SRA said it will continue its enforcement strategy in 2010/11, and is identifying for early investigation all firms that have entered the 2010/11 ARP that pose a high regulatory risk.

All firms in the pool will receive visits from the SRA, and the prompt payment of premiums will be a focus, the regulator said.