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Insurance program enters third decade on strong, positive footing

Quick summary:

  • base premium for 2016: $3,350 (unchanged since 2011)
  • Real Estate Practice Coverage Option (REPCO) $100 for 2016 (down from $250)
  • Run-off coverage now stands behind mentoring efforts of exempt lawyers
  • LAWPRO coverage for paralegal shareholders in combined licensee (incorporated) firms

Base premium stable

The base premium for 2016 will be $3,350 – unchanged since 2011.

While LAWPRO anticipates growing pressure on premiums from continued high claims costs and regulatory changes, those pressures do not yet warrant an increase to the base premium. Claims management and cost containment efforts are expected to support our efforts, in 2016, to handle projected claims without increasing premiums.

REPCO premium reduced to $100

For the third time since the coverage was introduced in 2008, LAWPRO has reduced the premium for the Real Estate Practice Coverage Option. REPCO will cost $100 in 2016, down from $250 in 2015.

REPCO was introduced in 2008 to support changes to the procedures for the registration of interests in land in Ontario. As the risk “picture”

for the new land registration regime has come into focus, and as the pool of premium reserved to manage those risks has grown, LAWPRO analysts have adjusted the premium downward twice to date: once in 2010 (from $500 to $400) and again in 2012 (from $400 to $250). Results of the most recent round of analysis have given us confidence that a further reduction, for the 2016 policy year, is warranted; this time from $250 down to $100. For further details of the REPCO program and the 2016 reduction, see the article “REPCO reduction reflects commitment to risk-rating”.

Run-off protection now available for mentoring activities by exempt lawyers

In recognition of the role that lawyers who are exempt from the payment of premium levies can play as mentors, as of 2016, qualifying mentoring activities* by exempt lawyers will generally be covered under the run-off policy applicable to those lawyers, subject to availability.

There would be no coverage for the exempt lawyer under the program policy in its pre-2016 form, since the run-off coverage afforded to exempt lawyers generally precludes coverage for claims arising out of professional services provided by the lawyer while exempt from the requirement to pay insurance premium levies. As of 2016, however, mentoring services provided by lawyers while exempt will be deemed to be professional services provided by the lawyer while still a practising lawyer insured under the program, for the purposes of run-off coverage.

LAWPRO coverage for paralegal shareholders in law corporations In recent years, licensed paralegals have begun, in some instances, practising in partnership with lawyers. To harmonize coverage as between lawyer and paralegal partners in those arrangements,

LAWPRO introduced coverage for paralegal partners in 2014. Beginning with the 2016 policy year, that coverage will also be required for paralegal shareholders in “combined licensee” (lawyer and paralegal) professional law corporations. Paralegal shareholders in these combined licensee firms (CLFs) can continue with their existing professional indemnity coverage until the date it expires in 2016, moving to LAWPRO coverage when it comes time to renew.