Despite the collapse of their indemnity insurer, policyholders of CBL Insurance Europe dac (CBLIE) will continue to be covered, it has been revealed.
However, according to the Solicitors Regulation Authority, in a report from The Law Society Gazette, clients cannot obtain a new policy with the company since the direction that CBLIE cannot write any business remains in force.
On February 26, the Central Bank of Ireland made an application to the Irish High Court to have a provisional administrator appointed to the firm. The bank had already instructed it to cease writing any business until further notice.
Explaining its move against the insurer, the Irish Central Bank said that CBLIE had failed to make adequate provision for its debts, including contingent and prospective liabilities, and had become unable to comply with its regulatory requirements in a material respect.
The publication also said that around 200 England and Wales firms are covered by the Dublin-registered company.
On March 12, the central bank confirmed that administrator KPMG was appointed to CBLIE.
In a statement, the SRA, meanwhile, said: “As was the case with a similar situation in 2010, an administration order under Irish legislation does not constitute an ‘insolvency event’ under the SRA Indemnity Rules 2013. There is, therefore, no requirement at this stage for firms insured with CBLIE to seek replacement qualifying insurance within 28 days of an ‘insolvency event’.”
Moreover, the regulator reportedly added that it will continue to monitor the situation and will advise of any significant developments or any change in its view.