SRA to consult on unrated insurers

The Solicitors Regulation Authority (SRA) is looking to run a consultation on unrated insurers after an investigation into the protection offered to customers of law firms insured by unrated insurers.

The SRA is proposing that all professional indemnity (PI) insurers have at least a B financial rating before being added to the Participating Insurers list of professional indemnity (PI) providers that can offer cover to solicitors.

The SRA commissioned Marsh to determine if clients of law firms enjoyed the same protections regardless of the rating of the insurer.

Marsh’s initial findings have suggested that the protection may not be the same for customers of law firms insured by unrated and rated insurers.

SRA director of policy and strategy Agnieszka Scott said: “We have always resisted calls to insist that insurers have a rating for a number of very valid reasons. The most valid of these was always the fact that we understood the protections offered to clients were the same, regardless of who their solicitor was insured with.

“Recent events, however, have made us look again at this issue to ensure that clients are protected. And we have been told that there may be inconsistencies, so we are proposing on insisting on a rating for insurers on the participating list.”

The SRA is having a board meeting on Wednesday to approve the consultation paper, which is set to be published in February.