Professional Indemnity Insurance premium income reporting loophole to be closed
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The Solicitors Regulation Authority is to make some changes to its rules (specifically the Qualifying Insurer’s Agreement) to close a loophole that has enabled some professional indemnity insurers to reduce their contributions to the Assigned Risks Pool (ARP). In general terms, the greater the amount of professional indemnity policy income that a qualifying insurer earns from solicitors, the greater the amount they should be paying in to the ARP.
But as the rules currently stand, multi-year polices have provided an opportunity for insurers to under report that premium income. Effectively, there has been a ‘window’ period during which premiums due on certain multi-year policies did not have to be declared as such. Not for much longer however. Amendments to the wording of the Qualifying Insurer’s Agreement have been approved. And all qualifying insurers have been informed.