Request by ABC Insurance Pty Ltd for approval of professional indemnity insurance policies for solicitors in NSW

The following professional indemnity insurance policies were submitted to the Attorney General for approval by ABC Insurance Pty Ltd in respect of the 2025-2026 NSW solicitors’ practising year pursuant to section 95 of the Legal Profession Uniform Law Application Act 2014: Primary lawyer policy wording and Run Off wording for ceased law practices (together, the ABC Policy).

The Attorney General has decided not to approve the ABC Policy.

In reaching this decision, the Attorney General has had regard to:

• The type of policy
• The level of insurance provided by the ABC Policy
• The terms and conditions of the ABC Policy
• The identity of the insurer
• The objectives of Part 4.4 of the Uniform Law
• Matters identified by ABC and stakeholders that are relevant to the matters above
• The effect that approving the ABC Policy may have on key market features including premium affordability, premium stability and market stability, and the public interest in those features.

The Attorney General has considered the public interest factors for and against approving the policy, including the following:

• Competition in a market can drive premium decreases and policy innovation. However, the Solicitors’ PII market has some special features that may impede the full benefits of competition.
• The Deloitte modelling suggests in the short-term some NSW solicitors (ABC’s customers) would benefit from lower premiums due to their lower risk profiles.  That may have the benefit of better aligning risk and premium costs, producing a more efficient and equitable market.
• Competition could drive lower administrative costs and efficiencies in the insurers, though the Deloitte modelling suggests this is not likely to result in premium prices being lower in the medium to long-term.
• The existing market arrangement has proved stable, the costs are reasonable and in line with some (but not all) jurisdictions. NSW solicitors can currently access PII cover.
• There is a risk that over time premium levels would return to existing levels and be somewhat higher due to the introduction of new marketing and search costs. This effect is modest but real and undermines the theoretical benefits of competition.
• There is a substantial risk of premium volatility, and more general market volatility as new insurers come and go based on the viability of the market to provide profit. Volatility in the PII market has historically caused significant problems for legal practitioners and consumers of legal services, and necessitated significant government intervention.
• Risk management activity may decrease exposing consumers to a greater extent.

On balance, the Attorney General considers that the public interest is best served by retaining the current market structure for the 2025-26 solicitors’ practising year, with Lawcover Insurance Pty Ltd as the sole provider of the minimum, compulsory layer of PII cover to solicitors and law practices who practise solely in NSW.

In reaching his decision not to approve the ABC Policy, the Attorney General has been assisted by a report prepared by Deloitte, ‘Expert Report concerning Solicitors’ Professional Indemnity Insurance in NSW’, October 2024 commissioned by the Department of Communities and Justice.

The Report is being proactively disclosed by the Department of Communities and Justice pursuant to section 7 of the Government Information (Public Access) Act 2009.

Please note that the report has been redacted to protect personal and commercially sensitive information pursuant to section 7(4) of the Government Information (Public Access) Act 2009.