SRA Board makes financial protection plans
As part of its annual review process, the Board of the Solicitors Regulation Authority (SRA) has decided to make a number of changes to its Financial Protection Policy.
The Board agreed to approve the necessary changes to the Qualifying Insurer’s Agreement and to the rules within the Client Protection section of the SRA Handbook when it met on Wednesday 16 May. The changes are designed to ensure the open-market system of PII is sustainable and competitive for the foreseeable future, and are proposed for implementation in October 2012.
The main proposed changes were:
- closing 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 started before that date);
- a requirement that all policies of qualifying insurance made after October 2012 have a 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 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 (to come into effect in October 2013);
- 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; and
- a requirement that qualifying insurers submit their credit ratings to the SRA, for publishing on the SRA website, and to include such ratings in quotation documents.