The SRA Handbook is no longer in effect. It was replaced by the SRA Standards and Regulations on 25 November 2019.
SRA Handbook
Insolvency of qualifying insurer
Back to version 21Version 16 of the Handbook was published on 01/04/2016. For more information, please click 'History' Above
Rule 6: Insolvency of participating insurer
- 6.1
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If a firm is carrying on a practice which is being provided with qualifying insurance by a participating insurer (whether alone or together with other participating insurers) and that participating insurer is the subject of an insolvency event then, subject to any waiver under Rule 19.1, the firm and any person who is a principal of the firm must ensure that the firm has in place qualifying insurance with another participating insurer which must be arranged as soon as may be reasonably practicable and in any event within four weeks of such an insolvency event.
Commentary:
It is important to be aware that the arrangements for professional indemnity insurance put in place by the SRA do not seek to protect firms against the insolvency of a participating insurer. If an insolvency event occurs in respect of an insurer, that insurer will cease to be a participating insurer for the purposes of writing new policies and firms insured by that insurer must effect alternative insurance in accordance with these Rules. This is because, in such circumstances, the insurer may not be in a position to pay claims in full. Any firm which has qualifying insurance with a participating insurer which is the subject of an insolvency event is required therefore to obtain replacement cover as soon as possible, and in any event within four weeks of the insolvency event occurring. Having done so, a firm should cancel the policy with the insolvent insurer and, if entitled to do so, seek a return of the premium relating to the balance of the policy period from the insurer which has become the subject of the insolvency event.