1. Steve Ray – Howden
The Professional Indemnity Industry’s View on the Regulatory Environment & Future Predictions

2. PROFESSIONAL INDEMNITY INSURANCE BROKING AND ADVISORY SERVICES

3. CONTENTS
“The Professional Indemnity Insurers and Brokers View on the Regulatory Environment & Future Predictions”
A bit of history
The SRA position
The CLC position
What does this mean?
Other regulators
The future
OUR KNOWLEDGE: YOUR ADVANTAGE

4. DIFFERING OPTIONS SRA regulated firms CLC firms CILEX Bar Mutual
Faculty of Notaries
ABS firms
Insurance arrangements
Differing regulatory perspectives
OUR KNOWLEDGE: YOUR ADVANTAGE

5. SRA POSITION – HISTORY
Solicitors in the commercial insurance market since September 2000
(SIF £250m in 1999 / Insurers £150m in 2000)
What changes along the way:
Moved common renewal date from 1 September to 1 October and then scrapped in 2013
Increase in minimum limit of indemnity from GBP1m to GBP2m for traditional partnerships and GBP3m for LLPs and Limited Companies (in 2004/5 year)
Removal of Assigned Risks Pool
OUR KNOWLEDGE: YOUR ADVANTAGE

6. SRA POSITION – HISTORY (CONT’D)
Various consultations:
Reduced limits of indemnity (to £500,000)
Allowing firms to asses their own appropriate limit of indemnity, including an overall aggregate
Reducing run-off cover to a minimum of 3 years
Previously looked at removing lender claims and Insurers with unrated security (Quinn, Lemma, Balva)
OUR KNOWLEDGE: YOUR ADVANTAGE

7. SRA CURRENT POSITION SRA run-off
6 year policy based on 225% to 350% of final year’s premium
Successor practice rules changed in in 2010, allowing for election to run-off
Consulting on making LSB regulation transfers easier
Sticking point is always coverage for reserved activities not covered under CLC (or others) policy and the run-off / past liabilities
If same Insurers there are theoretical deals to be done but grey areas means cannot get passed SRA (also Insurers sign up annually and therefore no clear comfort that will be there for the 6 year duration)
OUR KNOWLEDGE: YOUR ADVANTAGE

8. CLC POSITION
Insurance through a Master Policy with requirement to be insured with this until 2012 (been in place for 20+ years)
Landscape changed because of one large firm moving away from Master Policy
But no real opportunity for others until 2015
SLC open market option since 2015
Move to Participating Insurers Agreement meaning Insurers agree to provide coverage for firms subject to agreed minimum terms and conditions
Free run-off introduced at 1 July renewal (£2million aggregate)
OUR KNOWLEDGE: YOUR ADVANTAGE

9. WHAT DOES THIS MEAN?
Still a problem to move from being an SRA Regulated firm to a CLC regulated firm.
Frustrating for Solicitor firm’s specialising in Property Law
SRA advised would be able to transfer from December 2015, March 2016 but this now seems to be December 2016
There are Insurers ready, willing and able to provide the polices… but need SRA onside
OUR KNOWLEDGE: YOUR ADVANTAGE

10. OTHER REGULATORS CILEX BAR Mutual Faculty of Notaries
OUR KNOWLEDGE: YOUR ADVANTAGE

11. THE FUTURE What does the future landscape look like? SRA membership?
CLC members?
Polarisation – larger firms get larger
Associations / key influencers
Who does what?
What about other professions – ABS and Accountants and the like
OUR KNOWLEDGE: YOUR ADVANTAGE

12. Contact us Howden pi team 16 Eastcheap London EC3M 1BD 020 7133 1300

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