Committee on Lawyer Malpractice Insurance

R. Paul Childress, Chair


ALPS RRG (Attorneys Liability Protection Society Inc., A Risk Retention Group) is the VSB’s endorsed professional liability insurance carrier.  The Special Committee on Lawyer Malpractice Insurance (LMI Committee) continued its overviews of ALPS’s risk management endeavors during FY2012.  Three percent of ALPS net Virginia premiums are set aside for the benefit of Virginia State Bar members.  As of June 30, 2011, 3,568 Virginia lawyers were insured by ALPS in 1,847 firms.  As of June 30, 2012, 3,648 Virginia lawyers were insured by ALPS in 1,888 firms.

In the Spring of 2011, Wendy F. Inge, a very experienced risk manager who had previously worked for Minnesota Lawyers Mutual, was hired by ALPS, as a Virginia-based risk manager.  The committee has been delighted with her efforts on the program’s behalf.  Her reports to the committee throughout the year demonstrate her dedication and enthusiasm for new ideas and initiatives on how to better help Virginia’s lawyers avoid malpractice claims and become better, more ethical lawyers.

At its meetings held on September 28, 2011, November 16, 2011, February 15, 2012 and May 10, 2012, the LMI Committee continued to focus on monitoring ALPS performance; increasing the committee members’ knowledge in the LPL arena; and targeting the risk management budget toward educational topics to decrease liability for Virginia lawyers. The committee did not undertake an evaluation of the endorsement agreement during this bar year.

ALPS Corporation is the holding company for both ALPS RRG and Richmond-based Southern Title, a title-insurance company. Southern Title announced on September 15, 2011, that it would no longer be issuing new title policies.  A press release issued by Southern Title indicated that the suspension of operations was necessary as a result of a “substantial recent agent defalcation,” as well as higher than normal claims arising from policies issued by now-cancelled agents in the years between 2005 and 2008.  ALPS Corporation purchased Southern Title in July 2009. At its meeting on September 28, 2011, the LMI Committee discussed this issue with ALPS representative Chris Newbold, Executive Vice President.  ALPS has assured the VSB that ALPS’ reserves are separate from Southern Title’s reserves and are not at risk as a result of Southern Title’s problems.  Southern Title was put into a receivership by the State Corporation Commission on December 20, 2012, after ALPS Corporation refused to put any further funds into the company.  The LMI Committee will continue to monitor the situation.

In early June 2012, ALPS was notified by A.M. Best that its A- financial strength rating had been confirmed. This good news was counterbalanced by A.M. Best shifting the company outlook from Stable to Negative. Chris Newbold, executive vice president, explained that this has been a trend with other similarly situated carriers in the mono-line LPL market, such as Minnesota Lawyers Mutual and the Bar Plan, based on the overall trend in the lawyers’ professional liability market and last year’s operating performance.  The committee will be keeping a close eye on this development and watching the trends that concerned A.M. Best, i.e., loss reserve development, adverse underwriting results and defense costs.

Chris Newbold of ALPS continued to provide educational programs at the LMI Committee meetings held in FY2012.

At its meeting on May 10, 2012, David Bell, the new president and chief operating officer of ALPS, was introduced to the LMI Committee and gave a presentation on his vision for ALPS’ future. 

The committee did not have any new members join its ranks on July 1, 2012.

           

 

Updated: Aug 15, 2012