The unrated, Riga-based insurer, which operates in the UK through passporting rights, was prohibited from writing new UK business by Latvia’s Financial and Capital Markets Commission as of last month.
An SRA spokesman told Post: “We were aware of the Balva issue and are in the process of writing to all 1300 firms that have a policy with Balva outlining that the restriction does not affect their existing policies, so their current situation does not change at this time.”
He added: “Run-off cover is provided for, the only thing they will have to think about is what happens if the restriction is still in place ahead of the renewal period on 1 October.”
The Financial Conduct Authority is displaying a notice on its website warning of the ban by the Latvian watchdog. The FCA told Post that it has no jurisdiction over the firm and will therefore not be taking any action itself.
Balva is understood to have already been active in the general liability market before entering the challenging solicitors’ PI market via its broking partner Bar Professions. This comes after two other unrated insurers that operated in the UK solicitors’ PI market – Lemma and Quinn – both went into administration.
According to a recent survey of solicitors by the Law Society into the 2012-2013 renewal season Balva amassed a 9% share of the market in its first year, despite being an unrated insurer.
The same report indicated that a number of law firms had obtained two-year policies, some from from Balva, which would be affected if the ban were to continue throughout the October renewal season.
Sources told Post earlier this week that Balva had notified brokers that it was withdrawing from the employers’ liability and commercial combined markets with immediate effect. Balva’s UK products are marketed and managed by Aderia UK (MGA) from their London based offices, according to the firm’s investor Global Ridgeway Holding’s website. The Latvian regulator said it does not comment on individual market participants.
Global Ridgeway, Bar Professionals and Aderia declined to comment while Balva could not be reached at the time of going to press. However, more information is expected to be released on Monday.
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