The Law Society is pressing regulators to drop the title of ‘qualifying insurers’ after the failure of a third professional indemnity insurer.
The Society wants the Solicitors Regulation Authority to change the designation to ‘participating insurers’ to avoid perpetuating the misconception that insurers are vetted by the organisation. It is understood this change will be discussed at the SRA board meeting this week.
The developments comes after a decision by Latvian regulators to prohibit insurer Balva from writing any new business. The company has around 1,300 firms on its books and accounted for around 7% of the solicitors’ PII market in 2012.
Chancery Lane had warned firms in the lead-up to the renewal date to check insurer solvency following the collapse of two insurers, Quinn and Lemma, and a spokesman said urgent measures are needed to address the ‘systemic risk of insurer failure, which poses a future threat to firm viability and client protection’.
The SRA has written to firms affected to assure them that the restriction does not affect Balva’s obligation to provide cover for up to 90 days after 30 September if firms cannot renew.