Law Society reassures firms over Quinn, while outlining fallout from insolvent insurers
Ireland: Quinn administrators not planning call on compensation fund
The Law Society has issued further reassurance to the 2,911 law firms insured by Quinn that there is no reason to fear for the strength of their cover.
It came on the same day as the society also issued a practice note on the position if a qualifying insurer goes insolvent.
However, Chancery Lane stressed that this “does not in any way indicate that the society holds information about the financial position of any of the qualifying insurers beyond that which is publicly available, and in particular, does not change our current position on Quinn”.
In a statement, the society said that following a meeting with Quinn and its administrators, “we can confirm that no decision has yet been made about whether Quinn will be renewing or issuing new professional indemnity insurance policies in the UK from 1 October 2010. However, we continue to work on the assumption that Quinn will not be doing so”.
The society said it had also been assured that Quinn continues to be able to meet its debts and liabilities, including claims under policies, as they fall due, and that it has no current need to make an application to the Irish Compensation Fund – which would provide it with money to carry on the business – “but could do so if the situation changes”.
The society concluded: “Therefore there is no reason for solicitors to hold any greater concerns than in previous weeks.”
The practice note clarifies that solicitors would have four weeks from their insurer going insolvent to obtain new cover, after which they would fall into the assigned risks pool. During those four weeks any claims would be the responsibility of the insolvent insurer, but the note says such claims are unlikely to be paid in full, “leaving you liable for any shortfall”. Moreover, there is likely to be a lengthy delay in handling and/or paying such claims, it adds.
For claims lodged with the insurer before it went insolvent, “you may find that these claims are not met in full. You will be an unsecured creditor of the insolvent insurer and may in due course be able to receive partial payment of your claims but this is likely to be a drawn out process”.
The practice note can be found here.
Tags: Law Society, professional indemnity insurance
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