Tighter rules on whiplash claims will bring financial benefits to motorists says insurance industry
Frivolous and fraudulent whiplash claims will be reduced under new enforcement rules, ensuring motorists are not stung with inflated insurance premiums, says Chartered Insurance Institute.
In light of today’s Queen’s Speech, the Chartered Insurance Institute welcomes the Government’s commitment to a civil liability bill, which will tighten rules on whiplash claims.
It is essential that people who suffer from personal injuries get the help and compensation that they need, but it is also important to ensure that motor and liability insurance is affordable.
With the cost of living rising faster than wages, it is essential that the Government acts to prevent avoidable increases in the cost of car insurance.
The announced measures will deliver savings to motorists and represent a sensible approach to whiplash reform.
We also welcome the decision to put the FCA in charge of regulating claims management companies. The FCA has the resources needed to enforce the existing regulation.
While there are many instances where claims management companies provide valuable support to consumers entitled to compensation, there is a need for tighter enforcement of regulations.
Better enforcement will bring two significant benefits for customers.
First, they will be less likely to be pestered by claims management companies in unethical ways.
Second, they won’t have to pay premiums that are inflated by unscrupulous firms coaching people into making frivolous or fraudulent claims.
Cracking down on these firms using a proven regulator is welcome news and we look forward to working with the FCA and other important stakeholders to make a success of the new regime.
We welcome the mention in the Queen’s Speech on the Financial Guidance and Claims Bill. As set out in our response to the Government’s public financial guidance consultation earlier this year, we strongly urge the new Single Financial Guidance Body to have a statutory requirement for the body to work in collaboration – not just consultation – with the financial services sector.
If public financial guidance is to be meaningful and effective, it must be closely aligned with not just wider government policy in relation to issues like long-term savings and protection, but also must be closely coordinated with services offered by the profession.
We also suggested that the new body use this collaboration with the profession to develop a financial health check for consumers to take stock of their finances midway through their working lives. The Cridland Review also suggested this as an integral addition to its proposed reforms of state pension age.
It is disappointing that the uncertainty resulting from the General Election has forced the Government to water down its earlier commitments to scrap the triple lock and introduce sustainability into the welfare system.
It is clear that the process of leaving the EU has created a very full agenda for Parliament. However, to make Brexit a success, we must have a resilient welfare system and that can only come about if we have a strong culture of saving.
In order to prepare for life after Brexit, the Government should establish a permanent commission of experts to help create a public consensus around pension policy, and a strong savings culture.