SRA Consults on Financial Protection

SRA Consults on Financial Protection

The Solicitors Regulation Authority (SRA) has issued a consultation on the implementation of the next stage of policy changes to ensure clients are protected financially.

The changes were announced as part of the April 2011 Policy Statement.

The main changes include:

  • the closing of the Assigned-Risks Pool (ARP) as a provider of policies of qualifying insurance from 30 September 2013 (with the exception of the continued provision of run-off cover incepted before that date),
  • a requirement, from October 2012, that all policies of qualifying insurance make provision for extension by 90 days at the end of the insurance period if the insured firm has not taken out a new policy of qualifying insurance,
  • changes to Authorisation Rules to control the work that may be undertaken by firms during that 90-day period, and to remove authorisation at the end of the 90-day period should no new policy of qualifying insurance be obtained,
  • provisions for the funding of the ARP in 2012/13 to be provided by both the regulated community and the qualifying insurers,
  • provisions to move responsibility for making payments in respect of uninsured firms from the ARP to the Compensation Fund in 2012/13.

Richard Collins, Director of Standards at the SRA, said: “These proposals implement the next phase of the policy decisions announced by the SRA in April this year. As a public interest regulator, our objective is to ensure a comprehensive set of arrangements to ensure that clients are protected through compulsory PII and the compensation fund

“The changes proposed for implementation in October 2012 are particularly designed to ensure that the open-market system of PII is sustainable and competitive for the foreseeable future.”

Further details of the consultation can be found at www.sra.org.uk/sra/consultations/financial-protection-review.page

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