A leading insurer has said that the SRA’s failure to implement reform more quickly has deterred it from entering the solicitors’ professional indemnity market.

Elite Insurance said it will not join the market this year despite initial suggestions it would be writing premiums.

The company has issued a statement citing the lack of ‘essential changes to the Assigned Risks Pool (ARP)’ for its decision.

It went on to claim that potential new entrants were deterred by the multi-million pound burden of the ARP to the industry.

The company is also dismayed that issues relating to policy wording are not due to be addressed until 2013.

Barbara Bock, group executive officer of Elite, said: ‘We consider this and the recent status quo of the ARP to be a missed opportunity which would otherwise create a vibrant, sensible and competitive market for all concerned.’

The prospect of insurance firms not entering or pulling out of the market has been in place for several weeks, after the Solicitors Regulation Authority opted against immediate reform of the ARP.

The SRA said it was not the right time for radical overhauls, but the Association of British Insurers described the decision as a ‘missed opportunity’ for long overdue changes.

In a separate development, Elite has resigned from the ABI in protest at its approach to government reforms of civil litigation costs.

The legal expenses insurer said the ABI had gone too far in lobbying the Ministry of Justice for a radical shake-up of the claims system.

Jason Smart, chief executive, said he felt legal expenses insurers had not been considered in representations made by the ABI in response to the Jackson consultation.

'You’re expecting a victim who has been injured and lost earnings to pay 25% of his costs. He is totally innocent and has done nothing wrong and yet he has to pay for that.

'That to me is utterly disgraceful.

'It’s a game, it’s about arguing that claimants are fraudulent and putting the innocent person under the spotlight.

'We’re paying £8,000 a year in membership fees and paying to be part of a trade body actively competing to destroy our model.

'It’s purely to bolster their profits so effectively they can justify a huge increase in premiums.

'Jackson and the government have both naively fallen into the trap of listening to headlines and untenable arguments and we won’t stand for it.’

There is now speculation that other companies involved in writing premiums for legal expenses will follow Elite in leaving the ABI, but the organisation defended its stance.

An ABI spokesman said: 'We don’t comment on individual cases, but in general on issues like this we consulted across a full range of members including legal expenses members.

'In any issue you may get differing views and we have to formulate policy broadly on the interests of consumers and our members.’