SRA unveils crackdown to cut number of firms in ARP
The SRA has launched a crackdown on firms in the Assigned Risks Pool (ARP), amid concerns that the number of practices failing to find indemnity insurance could rise dramatically by October. There are currently 213 firms in the ARP.
The SRA has launched a crackdown on firms in the Assigned Risks Pool (ARP), amid concerns that the number of practices failing to find indemnity insurance could rise dramatically by October. There are currently 213 firms in the ARP.
A new strategy approved by the SRA's board last Friday (16 July) will see all firms approaching the end of their two-year term in the pool contacted by the end of this month. Firms which have failed to pay their ARP premiums will face regulatory sanctions, court action or closure.
The SRA will pursue 'regulatory action' in August and September, so that by October as many firms as possible will have been 'managed out of the ARP.'
By October, any firms whose position has not already been resolved will 'face the likelihood of intervention to close them down'. The SRA has said that firms entering the ARP in October 'will be treated in the same way'.
Chief executive Antony Townsend said: 'The tough enforcement strategy which the SRA board has approved is designed to ensure that firms stay in the ARP for as short a period as possible, that firms which pose a high risk are rectified or closed down and that firms who fail to pay their premiums face credible deterrents, including prompt closure.
'While it is right that firms experiencing difficulty in obtaining professional indemnity insurance should be given some assistance to do so, it is wrong that firms which are financially unstable or pose a significant risk should be propped up. That poses a danger to consumers, and a burden upon the profession who pays for the ARP. Neither is acceptable.'
To support this programme of action, the SRA said it had discussed with the Law Society bringing in 'outsourced expertise'.