Competition Commission investigates insurance

Investigations by the Competition Commission have found that the £11 billion private motor insurance market is not working well for motorists

The Commission found that insurer activities resulted in higher insurance premiums for the consumer due to a complex chain for the settlement of non-fault claims. It also stated that parties managing non-fault claims were focused on ‘earning a rent’ from the control of claims.

Alasdair Smith, chair of the investigation group that released the findings and deputy chair of theCompetition Commission, said: ‘We are now considering a range of possible measures, some of them far-reaching reforms, to ensure that the market serves the interests of customers.’

Smith added: ‘In most cases, the party managing the accident claim, typically a non-fault insurer or intermediary, is not the party liable to pay the costs of the claim. There is insufficient incentive for insurers to keep costs down even though they are themselves on the receiving end of the problem.’

This latter point is highlighted in the report which describes anti-competitive problems with contracts between
insurers and price comparison websites, meaning premiums could not be offered cheaper elsewhere. Issues with substandard repairs to vehicles, limited information about ‘add-on’ insurance products and their high cost, and the separation between control and liability are all resulting in higher costs for repairs and replacement cars.

Identifying the problem is only the first stage, and the investigation group also published a notice of
possible remedies.

The Association of Personal Injury Lawyer's (APIL) has prepared a response and highlighted the fact that the insurance industry has been fuelling the perception that personal injury claims are to blame for rising premiums as part of its long-term agenda to cut lawyers out of the road traffic accident claims process.

APIL also suggested that sanctions regulated by the Financial Conduct Authority should be considered whereinsurers fail to provide claimants with a clear understanding of their legal entitlements. Customers must
be fully informed of their rights from the inception of the insurance policy through to the end of any claim.

Insurance Scams Whistle Blowing on Increase

Reports from the public to insurers of suspected fraud rose sharply in 2013, to 6060, a 32% increase on the
previous high. Calls were made to the Insurance Fraud Bureau (IFB) Cheatline or Crimestoppers every 90 minutes.

Ben Fletcher, director of the IFB said appluaded such an increase.
"It shows that the public shares our contempt for insurance fraud," he said.
"Far from being a victimless crime, insurance fraud hits honest policyholders in the pocket and, in some cases, puts innocent road users in harm’s way."
"The Cheatline is a free anonymous service that helps us identify fraudsters and bring them to justice. Seeing the public make use of it is extremely gratifying.”

In 2013, the IFB supported 145 police arrests against insurance fraudsters across the country.

Case Management Companies to have complaint handling by Legal Ombudsman

The Financial Services (Banking Reform) Bill is rapidly progressing through the House of Lords and will allow complaints about case management companies (CMCs) to pass over to the Legal Ombudsman meaning theycould be liable for compensation payments to disgruntled customers. The change from the Ministry of Justice (MOJ) who currently handle such complaints will allow them to concentrate on bad practice. Justice Minister Shailesh Vara said that the Government is to bring on "tough new powers across the board" and "This latestchange will make sure people who get a bas service can get redress". The Legal Ombudsman has greeted the move and said "It will boost confidence in the service provided by the sector" and confirmed that the service"will be ready to start accepting complaints as soon as leglislation allows".

Mental Health Services in Norfolk to Change

Norfolk County Council have announced that Norfolk and Suffolk NHS Foundation Trust will have their contract for providing social care mental health ended later this year, after the Trust were criticised and concerns raised over its poor performance. See the full article here
http://www.bbc.co.uk/news/uk-england-norfolk-25915460 

TRAGIC TRAIN DEATH CASE
 
The Norfolk and Suffolk NHS Foundation Trust have agreed to payout to the family of a man who threw himself in front of a train in Essex after accepting they could have done more to help him.

The full story can be seen here.
http://www.bbc.co.uk/news/uk-england-norfolk-25629366

Morgan Jones & Pett have experience of handling claims where persons have not received care that they may have expected whilst having mental health issues. For more details please contact Simon Bransby or Sara Westwood on 01603 877000

WHIPLASH CLAIMS

Car insurers were under fire this week as they “encourage fraud and exaggeration” say MPs. 

MPs on the Transport Select Committee said insurers must immediately “put their house in order”.  MPs on the committee said insurance companies were guilty of accepting claims that had not received proper scrutiny and also accused the insurers of ignoring a previous recommendation to be more transparent about their links with other parties involved in accident claims, such as Claims Management Companies. 

The Committee made various recommendations such as requiring an accredited scheme for medical practitioners to file reports on accidents and asked the Government to consider reducing the period in which a claim can be brought for an accident down to one year, rather than the current three years. 

Did you know that insurers regularly referred details of accident victims onto their own solicitors panel and certainly before April 2013 when the law changed, referral fees were paid by the lawyers for these cases.  In addition insurers will often look to deal with a Claimant direct and offer a sum of money straight after an accident where the Claimant is not aware of the consequences of settling the claim at that stage before the medical prognosis will have become clear.

Let us hope the insurers take heed.......