With effect from September, firms will have a choice of obtaining their indemnity insurance cover through a managing general agency or from another approved insurer.

The Law Society wants to ensure a smooth transition to the new arrangements and to enable members of the profession to be fully informed in good time to prepare for the change.

I chair a task force which has been charged with supervising the move to the new arrangement.The Solicitors Indemnity Fund (SIF) will cease to provide new cover from 31 August, although it will continue to deal with claims or circumstances notified before that date.Instead, firms will have the freedom to negotiate terms from any 'approved insurer'.

This gives effect to the results of a ballot of the profession in which 70% of those who voted favoured having a choice in the way they obtained their indemnity cover, rather than having to purchase cover from a compulsory scheme.

It is important to understand the following:-- Indemnity insurance will still be compulsory;-- Firms will still have to purchase at least a minimum cover of £1 million, in line with the minimum terms which will be settled by the Law Society Council in April 2000.-- Firms will not have a completely free choice about where to obtain cover.

Indemnity insurance must be obtained through the newly-established managing general agency or from one of the insurance firms on the approved list of insurers which have agreed to comply with the minimum terms.What firms should do nowThere is no need for any immediate action.

In April, the Law Society's indemnity task force will circulate all firms with the details of the new indemnity rules when they have been approved by the Council.

The task force will be communicating regularly with the profession as the year progresses, so that practitioners will have all the information they need when the time comes to arrange their firm's cover for the 2000/2001 indemnity year.

In the meantime, we recommend that this would be a good time for firms to review their risk management procedures, as evidence of sound procedures may help firms to achieve the most favourable terms of cover.Are you going to retire this year?Under the current SIF scheme, principals in firms which close with no successor are provided with free 'run-off' cover for any claims which arise after the firm closes.

This will continue for any principal who retires before 31 August 2000.Principals who are considering retiring after that date should note that it is not certain that the same level of free run off cover will be available under the new arrangements from the managing general agency or from the other approved insurers.

The Law Society will provide additional information about run off cover when the terms of cover available from the agency and approved insurers are settled.Additional information and telephone helplineThe indemnity task force recognises that it is of the utmost importance to keep the profession up to date with progress towards the new arrangements.

During the next few mon ths it will publish information leaflets and there will be regular articles in the Gazette.

A special area of the Law Society's Web site will be dedicated to information about the new arrangements.

The web address www.indemnity.lawsociety.org.uk will bring you immediately to the relevant Web pages.Solicitors with any general enquiries should contact Barbara MacIntosh at the Law Society's practice advice service; tel: 020 7316 5715.

However, practitioners should note that the details of the new arrangements are currently being finalised, so we cannot yet provide information about what the terms of cover will be.

This information will be available by May 2000 in good time for solicitors to make a choice well in advance of September 2000.