BIBA and Government fighting fraud

19th January 2016

The British Insurance Brokers’ Association (BIBA) actively supports moves to reduce insurance fraud and therefore warmly welcomes the recommendations of the Insurance Fraud Taskforce of which we, alongside other industry bodies and stakeholders, have been a member.

The Insurance Fraud Taskforce was created with the purpose of investigating the causes of fraudulent behaviour and recommending solutions that will lead to a long-term reduction in insurance fraud and change the perception of this being a victimless crime through altering existing practice.  The current prevalence of insurance fraud adversely affects every honest insurance customer by adding £50 to the annual insurance bill for every UK policyholder.

At BIBA’s parliamentary reception today the Economic Secretary to the Treasury, Harriett Baldwin MP, announced the recommendations made by the Taskforce.  She commented:

Economic Secretary to the Treasury Harriett Baldwin said: “A key part of our long term plan is to make sure that the insurance industry works for consumers. That’s why we launched the Insurance Fraud Taskforce in January 2015 to tackle insurance fraud.  After a year of valuable research and ground breaking dialogue, I welcome the recommendations that have been published today.

“These recommendations will galvanise our collective efforts to tackle insurance fraud, and will ultimately reduce costs for consumers.”

The key recommendations include:

  • Government to review ways in which fraudulent late claims can be discouraged through changes to court costs and evidence rules such as;
  • directing older claims to the small claims process  not the fast track process,
  • reducing recoverable costs by 50% if an injury claim is notified late, and
  • introducing a damages award range for soft tissue injuries.
  • Demanding that the Solicitor’s’ Regulation Authority (SRA) be tougher on fraud by working with the Claims Management Companies’ (CMC) regulator to properly and strongly enforce referral fee bans. In addition, to ensure that organisations not currently regulated are brought into the regime.
  • The Taskforce also calls on Government to develop and deliver a coherent regulatory strategy to clamp down nuisance calls and texts to reduce the number of honest customers being coerced into making spurious claims.

The recommendations arose from 12 months of intensive investigation and discussions among the many different stakeholders involved in the insurance sector, and are designed to improve outcomes for customers.

Graeme Trudgill, Executive Director, BIBA said; “For some years both the incidence and cost of insurance fraud have been increasing with the impact being felt by honest customers. BIBA has included fraud related calls for action in our manifestos for a number of years so we were keen to participate fully in the Taskforce and our 2016 Manifesto, #FairnessForAll, calls for its recommendations to be implemented.  We are also pleased that the separate recommendations of the independent review of claims management regulation undertaken by Carol Brady, have been referenced in the Taskforce recommendations as we believe stronger regulation and enforcement is key to helping reduce fraud.

“It is clear that the ban on referral fees has not been properly policed and in our Manifesto BIBA has also called for a level playing in terms of the regulation of CMCs and for more supervision of these companies. To see this in the Taskforce recommendations is great news for the insurance industry and its customers.”

-ENDS-

Notes to editors

 

  1. For further information please contact:

BIBA press office:

Pam Quinn, Communications Manager

020 7397 0223

quinnp@biba.org.uk

  1. About the British Insurance Brokers’ Association

The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA membership includes just under 2,000 regulated firms.

General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff. 54% of all general insurance is sold by an insurance broker and they arrange 79% of all commercial insurance business.

Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.

BIBA helps more than 250,000 people a year to Find-A-Broker, both online and via the telephone.

BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues.