The mandatory professional indemnity insurance (PII) renewal date is 1 December 2013. This date is not negotiable. All cover under the current indemnity period will expire on 30 November 2013.
Confirmation of cover
Confirmation to the Society of PII cover must be provided within three working days. Therefore, confirmation of cover in the designated form must be provided to the Society on or before 5 December 2013.
Guide to Renewal
The Guide to Renewal for the 2013/2014 indemnity period is published on the Society’s website to assist the profession with renewal. The guide includes information such as tips for renewal, important points to note and a guide to insurers and brokers. This guide will be updated frequently with new information received by the Society, in particular with regard to what insurers will be in the market in the next indemnity period.
2013/2014 renewal resources
Renewal resources for the 2013/2014 indemnity period are available to download from the Society website (at www.lawsociety.ie/PII) and currently include:
- The common proposal form for the 2013/2014 indemnity period,
- The Guide to Renewal, and the
- Participating Insurers Agreement.
This area will be updated frequently as more documentation becomes available.
Disclosure of financial ratings
Financial ratings are obtained by insurers following assessment of their financial strength through an independent process by a rating agency. While a financial rating is an indication of the financial strength of an insurer, it does not guarantee an insurer’s financial solvency.
The Society has changed the title of ‘qualified insurer’ to ‘participating insurer’ for the 2013/2014 indemnity period to more accurately reflect and emphasise the Society’s limited role regarding insurers in the solicitors’ PII market and to dispel the mistaken impression of approval or financial strength that may have been incorrectly inferred from the title ‘qualified insurers’.
Participating insurers are required to disclose their financial rating, or absence thereof, to firms when issuing quotations. This requirement was introduced in the 2011/2012 indemnity period and remains in place for the 2013/2014 indemnity period in order to:
- Allow firms to make a more fully informed decision on their choice of insurer,
- Ensure full transparency for the profession in relation to participating insurers meeting, or not meeting, generally accepted standards of financial strength, and
- Do so in a way that will not restrict firms’ choice of insurer.
It should be noted that all participating insurers in the market are permitted to write insurance in this jurisdiction under the supervision of the Central Bank. The Society is not responsible for policing the financial stability of any insurer. The Society does not vet, approve or regulate insurers.
More in-depth information on financial rating of insurers can be found on the Society’s website at www.lawsociety.ie/Pages/PII/ and in the Guide to Renewal.
Notification of claims by 30 November 2013
All claims made against solicitors’ firms and circumstances that may give rise to such a claim should be notified to the firm’s insurer as soon as possible. In particular, claims made between 1 December 2012 and 30 November 2013 (both dates inclusive) should be notified by the firm to their insurer by 30 November 2013.
It is proper practice for firms to notify insurers of claims or circumstances during the year as they arise, not at the end of the indemnity period. Notifying all claims and circumstances at the end of the indemnity period is referred to as ‘laundry listing’ by insurers, and is not looked on favourably. Firms should also ensure that their claims and circumstances notifications meet the notifications requirements set out in the insurance policy terms and conditions.
The minimum terms and conditions for PII were amended in the Solicitors Acts 1954 to 2008 (Professional Indemnity Insurance) Regulations 2011 (SI no 409 of 2011) to permit firms to report claims or circumstances of which they are aware prior to expiry of cover to their insurer within three working days immediately following the end of the coverage period. Therefore, a three-working-day grace period from 30 November 2013 is in place with regard to notification of claims and circumstances to your insurer.
Insurers are required to leave quotes to firms open for a period of not less than ten working days. This requirement was introduced in the 2012/2013 indemnity period and remains in place for the 2013/2014 indemnity period.
Amendments for 2013/2014 indemnity period
The definition of ‘legal services’ has been amended to include ‘acting as a personal insolvency practitioner’.
The definition of ‘succeeding practice’ has been broadened. Any firm conducted by a partnership where half or more of the principals are identical to those persons who were principals of any partnership that conducted the previous practice will be considered to be a succeeding practice. Any practice conducted by a sole practitioner who was one of the principals conducting the preceding practice will be considered to be a succeeding practice.
The double trigger (the requirement that claims be made and notified in the same indemnity period) provisions have been amended so that, for claims or circumstances arising after 1 December 2013, the requirement to notify the claim or circumstance in the same indemnity period as it was made will not apply if your firm has continuous cover with that insurer (has not changed insurer between the indemnity periods). The self-insured excess for the claim shall be the higher of the applicable self-insured excesses between the two indemnity periods, and the limit of liability shall be the lower of the two indemnity periods. Where a firm has changed insurer between indemnity periods, the double trigger applies and the claim or circumstance must be notified in the same indemnity period in which it was made. Again, firms should ensure that they notify claims and circumstances to their insurer as soon as they arise, and that they meet the notification requirements as set out in the firm’s insurance policy terms and conditions.
With regard to the common proposal form, it has been made clear that insurers may only request supplemental information from firms after submission by the firm of a completed proposal form for the purpose of clarifying information contained in the completed proposal form.
Insurers are required to provide the Society with information on their financial rating (if any), their country of registration, and their home state regulator as at the date the Participating Insurers Agreement is signed, and this information will be published by the Society in the Guide to Renewal.
The run-off fund provides run-off cover for firms ceasing practice:
- That have renewed their PII for the current indemnity period, and
- Subject to meeting eligibility criteria, including that there is no succeeding practice in respect of the firm.
Any firm intending to cease practice after 30 November 2013 is required to renew cover for the 2013/2014 indemnity period.
Further information on run-off cover and succeeding practices can be found on the Society’s website at www.lawsociety.ie/Pages/PII/Run-off-Cover/.
The Society continues to operate the PII Helpline to assist firms in dealing with PII queries. The helpline is open Monday to Friday from 10am to 4pm and can be contacted on tel: 01 879 8707, email: email@example.com.