The PII rules planned by The Solicitors Regulation Authority (SRA) to reduce the minimum level of professional indemnity insurance (PII) cover to £500,000 from £2 million were not in place for the 1 October 2014 renewal.
The SRA announced the delay in early August after oversight regulator, the Legal Services Board, requested an extension to the initial period for considering the application.Crispin Passmore, SRA Executive Director for Policy, said: “The LSB has always had the option of extending its assessment periods and often does so: this is not an unusual move. We made clear in our application to the LSB that a positive decision by the end of August would allow the rules to come into force in time for the 1 October 2014.
“If the LSB does not make a decision in time, or does not approve the rule changes, then the current rules remain in place for those policies that need to be renewed on 1 October. The ball is very much in the court of the LSB, and we will comment further when appropriate.”
James Page, Associate Director, Brunel Professional Risks says the delay proved to be a disappointment to many solicitors. “Some firms had been hoping that the new rules would save them money on their PII renewal, but have had to go through the renewal on the basis of the existing, higher indemnity limits.” He says that the key is always for firms to be ready for renewal well in advance, and to keep PII implications in mind throughout the year. “Insurers want to insure the best managed firms, with clear risk management procedures. Taking the time to prepare carefully thought through proposals will put firms in a favourable position to secure competitive rates at renewal.”