Regulator launches consultation on changes to Professional Indemnity Insurance arrangements
A consultation has been launched on possible changes to professional indemnity insurance (PII) cover for conveyancers and probate lawyers.
The Council for Licensed Conveyancers (CLC) is updating its policy on PII, a vital element of consumer protection that all the firms it regulates must have.
The last review was carried out in 2016, prompting the move to an open market scheme based on standard Minimum Terms and Conditions (MTC) and governed by a Participating Insurers Agreement (PIA). The agreement means that CLC-regulated practices can seek cover from any insurer who is part of the scheme, with a £2million minimum level of cover for every claim including run-off cover should firms close.
Following changes in the industry and the current challenges in the PII market, however, the CLC decided it was timely to revisit the scheme and is proposing limited changes to ensure it continues to protect client interests, is affordable and proportionate, and supports a healthy and competitive PII market as well as innovation and growth in legal services.
Areas under review include the integrated run-off provided by the MTC, the approach to excesses set by insurers and whether standalone cyber insurance should be mandatory.
The consultation, which runs until 25 February, is seeking feedback from regulated firms, insurers, consumers, and other professionals across the wider industry.
Sheila Kumar, chief executive of the CLC, said:
“Conveyancing and probate transactions involve people’s largest assets and life savings, and that’s why we require all our regulated firms to have robust professional indemnity insurance in place to safeguard consumers.
“As a result of market pressures over recent years, however, we have seen examples of firms being refused cover because of work carried out in the past even if any notified circumstances do not proceed or they no longer undertake that type of work. Another issue is that new and transferring firms have found it difficult to secure quotes in a timely way from participating insurers.
“This consultation follows a comprehensive review of our current arrangements, which has included a well-publicised call for evidence last year and lengthy discussions with insurers and brokers as well as our regulated community.
“We are keen to hear from as many interested parties as possible to ensure our PII arrangements are fair and fit for purpose in the future.”
The full consultation document can be found here. Responses should be sent by 25 February to [email protected] or by post to: The Council for Licensed Conveyancers, WeWork, 131 Finsbury Pavement, London, EC2A 1NT.
In addition to the consultation, the CLC also plans to hold further discussions about PII with stakeholders and will be circulating a brief questionnaire to garner opinion on the key issues. These steps will be promoted on the CLC website and in its newsletters.
Any changes to the scheme will be agreed by the Council for the CLC at its meeting in March then submitted to the Legal Services Board for approval ahead of the PII renewal deadline in June.
Kindly shared by The Council for Licensed Conveyancers (CLC)
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