The Law Society last week hosted a Round Table event on PII, which provided a well-timed opportunity to review the recent renewal season, and look to the future, with SRA changes to the Minimum Terms & Conditions once again on the agenda.  The event was well attended with representatives from the majority of the major Participating Insurers, and strong representation from brokers and lenders.

SRA letter to 'uninsured firms'

Unsurprisingly, the topic of the SRA letter to supposedly 'uninsured' practices, come up early in discussions.   While the SRA stance last week was unapologetic, there was a consensus from the Round Table members that the new team at the SRA had failed to engage with insurers or brokers, despite several overtures to do so.  The fact that, last year, there were fewer than 200 firms wrongly identified as uninsured, in contrast to this year's 1,863, should have been a clear signal that something was amiss – and could have been much more productively resolved than a blanket mailing in the form that was sent.    Insurers have been asked to provide a further declaration of insured practices to the SRA this week, followed by a quarerly update, in a bid to avoid replication of the fiasco.

 'Stable' Renewal as firms move to rated markets

There was consensus also on the outcome of the recent renewal season.  In contrast to 2013, it was a benign market for the majority of insured firms, with rates remaining fairly stable. The number of firms falling into the Extended Indemnity Period (EIP), having failed to obtain insurance, were significantly lower than the same time last year.    Reassuringly, and perhaps as a consequence of the high profile collapses of Balva and Berliner, unrated insurers have taken a reduced share of the market this year, as more firms have moved to secure rated insurers.

MTC Changes in 2015?

With the Announcement by Paul Phillip, Chief Executive of the SRA, that he expects a decision from the Legal Services Board on their plans for MTC reforms 'in the next few weeks', all those with concerns regarding the proposed reduction of the minimum level of cover to £500,000 are encouraged to make submissions to the LSB before the end of November.

There is clearly a debate to be had about the current MTC wording, and the issue of run-off cover was a clear point of contention with the insurers present at the round table, however as this column has suggested on many occasions, the lenders' representatives present made it clear that MTC changes would merely be tinkering with the problem – the root cause being the sheer volume of claims arising from residential conveyancing.

In Scotland, the profession recently rejected the idea of separate representation for purchaser clients and lenders, notwithstanding the potential benefits in terms of reduced lender claims.   It appears that there is still a debate to be had south of the border on the pros and cons of that, alongside other proposals which would meaningfully reduce the number and cost of property claims for the profession.