SRA Handbook

Firms which fail to apply to the ARP

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Rule 14: Firms which fail to apply to the ARP

14.1

A firm in default which is entitled to be admitted to the ARP and to be issued with an ARP policy in accordance with Rule 13.1 but which does not make an application to join the ARP shall, notwithstanding, be liable, together with any person who is a principal of that firm, to pay to the Society an amount equivalent to the ARP default premium calculated for the whole of the period of default.

14.2

A firm in default which is entitled to be admitted to the ARP and to be issued with an ARP run-off policy in accordance with Rules 13.4 and 13.5 but which does not make an application to join the ARP shall, notwithstanding, be liable, together with any person who is a principal of that firm, to pay to the Society an amount equivalent to the ARP run-off premium calculated for the whole of the period equivalent to that which would be provided by an ARP run-off policy in accordance with Rule 13.5, or, if shorter and if it can be ascertained, the period of default.

14.3

Any amount payable in accordance with Rules 14.1 or 14.2 shall be determined by the ARP manager on the basis of such assumption as to the firm's gross fees and other matters as the ARP manager shall in its absolute discretion determine, and may be reviewed from time to time by the ARP manager in its absolute discretion on the basis of any further information provided to it. Any such amount paid under Rule 14.1 or 14.2 shall be deducted from any amount payable pursuant to Rule 15.2. The ARP manager may and is hereby authorised to recover all sums due under Rules 14.1 or 14.2 on behalf of the Society.