At the time of the demise of the Solicitors Indemnity Fund (SIF) in 1999, one of the major causes of the losses suffered was considered to be the very large number of claims arising from mortgage fraud in the early 1990s. The SIF shortfall led to solicitors being offered the opportunity to purchase their compulsory insurance on the open market as it was perceived that insurance cover would be cheaper once competition was introduced into the market. To date, that has largely been correct. In the final year of the SIF, premium taken from the profession amounted to £255m. Since 1999, premium has, on the whole, been lower than this figure and the 2006-07 renewal saw gross premiums of just £211m.
But could that all be about to change? Insurers have begun to report that they are once again seeing an increase in the number of claims arising from mortgage fraud. In the early 1990s, the majority of claims arose from residential conveyances with the huge losses suffered arising from the sheer volume of the claims. Fraud which are emerging this time around are not yet on the scale seen before and the economic conditions are nowhere near the same.
