“Insurance companies are ready” is the assurance being offered by the Association of British Insurers (ABI) in response to the Civil Liability Bill amendment aimed at ensuring that cost savings are indeed passed on to policyholders.
During this week’s second reading of the bill in the House of Commons, the Secretary of State for Justice and Lord Chancellor David Gauke stressed the government’s intent to hold insurers to account by bringing forward an amendment to introduce an effective means for reporting not only on the savings made but also how they are passed on.
One of the questions posed during the second reading centred on whether “real teeth will be used to ensure that insurance companies cannot get away with keeping this cash themselves.” The query came from the Member of Parliament for Kingston and Surbiton, Sir Edward Davey.
The notice of amendments has since been published.
“Before the end of a period of one year beginning April 01, 2024, the Treasury must prepare and lay before Parliament a report that (a) summarises the information provided about the effect of Parts 1 and 2 of this Act, and (b) gives a view on whether and how individuals who are policyholders have benefited from any reductions in costs for insurers,” read the Parliament’s records.
According to the document, the Financial Conduct Authority must assist the Treasury in preparing the report.
Commenting on the development, the ABI cited the industry’s readiness.
Rob Cummings, the trade body’s head of motor and liability, said: “Insurers have already publicly committed to passing on to customers cost benefits arising from the government’s reforms to personal injury compensation and the discount rate, and the proposed amendment to the Civil Liability Bill sets out a mechanism for insurers to demonstrate this.
“If the bill proceeds in its current form, it will fix a broken system in the best interests of both insurance customers and taxpayers, and insurance companies are ready to provide the necessary evidence of their contribution to this.”
