SRA denies responsibility
Gallagher London has slammed the Solicitors Regulation Authority (SRA) for not showing better leadership over insurer ratings.
The critique follows news that unrated Latvian insurer Balva has been banned from writing new UK business by the Latvian Financial and Capital Markets Commission. Balva mainly wrote solicitors’ professional indemnity (PI) insurance in the UK.
Gallagher London professional risks practice director Ben Waterton said: “It is understood that Balva currently insures more than 1300 firms in the UK and while, at this stage, the ban does not affect any existing policies in force, this development must surely be another embarrassment for the SRA. Once again it has failed to address the continued issue of unrated insurers - despite approving them to sell PII.
“In recent years we have seen both Quinn and Lemma, going into administration in the solicitors’ PI space and this should serve as a wake-up call to the SRA to demonstrate stronger leadership on this issue of insurer ratings. Let’s not forget that another professional regulator, the Royal Institution of Chartered Surveyors, took decisive and positive action on this matter in 2008 when it removed Quinn from its list of recommended PI insurers. So we’ve seen that it can be done elsewhere.”
Waterton added: “The trend is there to be seen so it’s simply not good enough to sit there with a ‘fingers crossed’ attitude that ultimately puts law firms, typically in the sub-four partner area, in a very distressing position - notwithstanding the pressures they face elsewhere.”
But the SRA said it was not responsible for managing insurer ratings. SRA director of policy and strategy Agnieszka Scott said: “Insurers are regulated by financial regulators, not the SRA, who regulates solicitors. We have taken an action to write to the solicitors affected and advising them of the situation with regard to the fact that Balva cannot take on any new business in the UK at the moment.
“As we have already said, we are in close contact with the Latvian regulators and the Financial Conduct Authority and will continue to monitor the situation with Balva.”
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