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One eyed, ill informed, evidence light, incoherent nonsense from the SRA.

To provide public protection the minimum terms need to ensure that there is reasonable headroom were there to be a series of claim which allow the aggregation not to bite and for the insurer to be able to avoid the policy. The £500k limit provies no such protection.

http://www.clydeco.com/insight/article/aggregation-in-the-supreme-court-the-aig-appeal-is-heard

The costs of PII is predicated, among other things, on cases being on average well below the minimum terms which is why an extra layer of £5 or 7M costs a fraction of the basic layer.

Cutting the minimum terms is unlikely to result in a material saving for firms that chose to reduce their minimum terms and where it really matters i.e. conveyancing, most lenders will require at least the existing minimum terms to allow firms a place on their panel.