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The Legal Expenses Insurance (LEI) market is facing a fundamental change in coming months as a result of changing legislation and regulation.


There has been pressure from the FSA and Lord Jackson for LEI providers to allow policyholders to choose their own solicitor firm to manage their claim, rather than use a firm from the insurer’s panel. Richard Finan, Director of Arc Legal Assistance, argues that by using a panel solicitor there are a number of benefits. Not only does it provide greater underwriting control but also better cost-control enabling the insured’s indemnity under the policy to go further. In addition, based on Arc Legal’s own experience, panel solicitor use has resulted in better customer satisfaction compared to those who use their own solicitor.


Some LEI providers are suggesting that the market should move away from an add-on policy model to providing cover on a standalone basis, similar to that used in Germany and South Africa. Richard says that a move to standalone cover would inevitably lead to an increase in premium. As a result, he believes, the UK market would face real challenges adapting to such a high-cost optional premium approach especially as there is already a low-cost, add-on option for the same product being used.


Richard was speaking to Insurance Age. The full article can be found on their website at

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