News

Balva suspended: where does it leave the Insured firms?

By Kevin McParland
07.05.13
Download the MFL Professional technical bulletin, 'If you think it's expensive to hire a professional, wait 'til you hire an amateur'

In our latest solicitors’ briefing, we look at the effects of the suspension of Balva’s license on insured firms.

“By now you will have been bombarded with news that the Latvian Insurance Regulator has prohibited Balva Insurance Company from writing any insurance business, both in their home country and overseas.

There is no suggestion, at this stage, that Balva will not honour their policies until 30th September (and beyond) and the restriction may be lifted once the ‘issues’ with the regulator have been resolved.

But where does that leave you, the Insured firm? As things stand the policies are still in force and in a recent letter Richard Collins at the SRA advised that the obligation on Balva to see out the terms of their contract with firms remains unaffected. However, it stops short of advising that Balva will still be around to honour those obligations.

While Balva suspended was reported as being different to that of Quinn and Lemma, comparisons will ultimately be drawn.

Like Lemma and Quinn, Balva carries no official financial security rating. But what does this mean? Should you be concerned? Is the level of premium the only factor to take into account when buying PII or does it matter who you insure with?

Financial Ratings are useful for buyers of insurance as they provide details on an insurer’s ability to pay its obligations under the policies it has issued. It affords you the opportunity to compare the relative financial position of insurers that are providing the ultimate safety net for your practice. This is very important in view of the gap in time between notifying potential claim and that claim being due for payment…”

To read on, download “If you think it’s expensive to hire a professional… wait until you hire an amateur”, here.

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