SRA investigates two firms amid indemnity insurance concerns
The SRA said it had worked closely with most EPP firms
The Solicitors Regulation Authority (SRA) is investigating just two law firms which it said should have closed at the end of last year, having failed to find indemnity insurance.
The SRA said the two firms were Craig & Co Law in Wigan and Active Solicitors & Co in Wolverhampton. They are the only firms being investigated out of a total of 39 that entered the extended policy period (EPP) on 1 October last year.
“Of these 39, most were in the process of orderly closure, merger or acquisition, and a handful successfully obtained cover while in the EPP,” the regulator said.
Robert Loughlin, SRA executive director of operations and quality, said: “These two firms do not appear to have valid insurance and have not closed properly so we are investigating them in order to protect the public interest.
“While the majority of those that entered the EPP have worked with us closely and provided assurance about their circumstances, these two have not provided us with the information we require to be satisfied that client matters have been dealt with properly.”
The regulator said 49 firms were initially registered as entering the EPP, but this fell to 39 after the SRA received further information from some of them. In 2013, 287 firms entered the EPP.
The EPP is broken down into a 30-day period in which firms can carry on as normal as they seek to renew, followed by a 60-day cession period during which they cannot take on any new instructions and must plan for closure.
The SRA added that nearly 15% of practices have now moved away from the 1 October as their indemnity renewal date.
In a separate development, the regulator has published estimated premium income shares for indemnity insurers this year.
The largest, by a long way, is QBE Insurance (Europe), which expanded its share from 14 to 17%. QBE was followed by Travelers Insurance, with over 10%, and Zurich Insurance with 8.5%.
The proportion of law firms’ indemnity cover provided by the three remaining unrated insurers has fallen sharply. Alpha Insurance is now insuring 3.8% of the market, down from 6.5% last year. Elite Insurance, which insured 3.95% last year, is insuring only 2.6%, while Enterprise is insuring 1.4%, down from 1.7%.
Tags: extended policy period, Indemnity insurance, Solicitors Regulatiion Authority
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