The Solicitors Regulation Authority has confirmed it is reviewing the risks posed to clients associated with insurance firms that have been hit with financial difficulty. According to the SRA, unrated insurers could face a ban from solicitor’s professional indemnity market by October 2014.
The decision by the SRA is a result of the collapse of Latvian insurer Balva, who had provided approx 1,300 law firms professional indemnity cover. The SRA has in the past deferred to financial regulators to decide if insurance firms were eligible to write indemnity insurance – that may change now after the review initiated by the SRA standards committee.
The review will be completed in time for any decisions that require changing the current structure, to be executed and in place for the next indemnity period starting on 1 October 2014.
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