The Government is to reform the regulation of the claims management sector to “help to drive out further unnecessary costs from insurance premiums”. The announcement has come in this year’s so-called summer Budget, the first one delivered by the new Conservative Government.
The Chancellor, George Osborne, confirmed in the official Budget document that there is to be a fundamental review of the regulation of claims management companies (CMCs), led by the Chairman of the Chartered Trading Standard Institute Board, Carol Brady.
Brady will report to HM Treasury and the Ministry of Justice in early 2016.
In addition, the Budget states that there is also a case for reform of the fees that CMCs charge consumers, particularly in those instances where consumer complaints fall within the remit of the Financial Ombudsman Service. As a result, the Government is planning to bring forward proposals for the introduction of a cap on the charges that CMCs make. It said there would be a consultation on the matter in due course.
Commenting on the announcement, National Accident Helpline’s chief executive, Russell Atkinson, said: “We welcome the review into the regulation of CMCs to ensure that the whole industry adheres to professional and ethical standards.
“National Accident Helpline has been working hard to drive up standards in the sector, through initiatives such as our Stop Nuisance Calls campaigns, and has been working proactively with Government through the Insurance Fraud Taskforce. We look forward to working with the Government to ensure the practices of CMCs are in the best interest of consumers and access to justice is not impaired.”