Deadline day: Law Society says short time frame to accept quote breaches FSA rules
Quinn Insurance has finally confirmed that it will not be offering solicitors professional indemnity cover for 2010/11.
The news – reported by Insurance Times and the Law Society – means that 2,911 practices will be looking for new cover, but will be boosted by the deal done by Legal Futures Associates Travelers and Prime Professions to offer cover to sole practitioners who were insured by Quinn.
However, the Law Society Gazette reported that only around 75% of the 1,900 sole practitioners concerned will be taken on, and they will face premium rises of 15-20% (see story).
It comes as the Law Society has urged an unnamed insurer and its broker to stop imposing a requirement on solicitors that they accept their premium quote within just seven days. In a letter to the pair yesterday, the society said that it considered this a breach of Financial Services Authority rules.
The Law Society’s newly launched PII helpline has received calls from solicitors concerned about this seven-day acceptance period. In a letter to the insurer Law Society chief executive Des Hudson said there was a real danger that solicitors faced with this time frame may fear being unable to obtain cover and simply accept the quote without having had a proper opportunity to consider it and/or compare alternate quotations.
He argued that the time frame breaches rule 6.1.5 of the FSA Insurance Conduct of Business Sourcebook, which states that insurance firms are required at the pre-contract stage to “take reasonable steps to ensure a customer is given appropriate information about a policy in good time and in a comprehensible form so that the customer can make an informed decision about the arrangements proposed”.
The society said it has since become aware of similar allegations against other insurers, which it is investigating. It said any solicitor presented with a quote where acceptance is required in an unreasonably short time frame should contact the PII helpline on 020 7320 9545 or e-mail PII@lawsociety.org.uk.
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