Motor Panel Digest – December 2011

1st March 2012

Committee Issues
A new deputy chairman George Nicol (from Gallagher Heath) was elected. A thank you was also recorded for all of Paul Inskip’s support and technical help following his retirement from the Panel.

Government Investigation into Motor Insurance
The Transport Select Committee’s final report was published on 7th January.

The OFT has released a summary of their investigation. The OFT found that there was a general 12% premium increase in 2009/2010 and a 9% increase from 2010/2011 which totals 22% in the last two years. There was a focus on NI, where premiums were found to be around 11% more expensive than GB and not the 84% suggested by the NI Consumer Council. Drivers in NI do not shop around for deals as much as those in GB and there are more accidents per car in NI.

The OFT will now be conducting a market study on legal expenses and credit hire vehicles and there will be future consultations which BIBA will respond to.

The question was asked by HM Treasury to BIBA; What impact would a ban on referral fees have on brokers? BIBA’s position will be refined.    

Licence Validation
After long negotiations between IBM, MIB and the ABI, this is now moving forward. Committee members will be attending meetings. 
Comparison Sites
The FSA has now issued new regulatory guidelines for comparison sites, ensuring a more level playing field for members, particularly in regard to disclosures.

BIBA Conference 2012
The 2012 conference will be held in Manchester on the 16th and 17th May. It is free to all BIBA members, last year there were 4,152 attendees. BIBA are looking to have a breakout session on motor.

The motor session was subsequently confirmed with Barry Smith, Chief Executive at Ageas, David Williams Claims and underwriting Director at AXA, David Newman, Chief Executive at Carole Nash Insurance Consultants and Shona Robertson, Partner at H&R Insurance participating and Simon Jack, Business Correspondent on Radio 4’s today programme will be chairing the session. 

Rome II
There was a question raised about which Court deals with a claim if the parties involved in the incident are from different countries. The outcome was that the Court in the country where the accident happens will be the one who deals with it. The European Court of Justice advocate general confirmed. As the position has now been confirmed, the item can be removed from the Panel agenda.  

Exclusion of SD&P
The exclusion of SD&P use for young drivers on some fleet policies was discussed.

SF mentioned that there is a Broker Insurer Forum that has been set up and a sub group of GIBC are working with ABI members looking at generic areas and there is a working document which will be produced. The group will discuss issues of a general nature with a view to obtaining market protocols such as personal guarantees, TOBA’s and index linking. This SD&P issue will be added to the list. 

Fraud/IFB Membership
The ABI and BIBA have now produced an application fraud guide which is on the BIBA website and it highlights a common sense approach to what brokers can do at quotation stage to identify and combat potential problems. Application fraud is a growing concern and it is easier to commit fraud on the internet.

There is a new class of Insurance Fraud Bureau (IFB) membership which larger brokers can join (for £20,000) – there are ongoing discussions with the IFB about this cost. The IFB work with the police and will give brokers access to fraud data and ‘wash’ their client data against fraud databases which the broker does not currently have access to. The cost is unattractive to smaller members but there may be a new option for smaller brokers in 2012. It was agreed that it is worth joining if a company has concerns. There is a new person who has taken over from Glen Marr at the IFB and BIBA will arrange to meet them.        

Declined cases agreement
GT had asked if the Declined Cases Agreement is used. The ABI say that it is not enforceable. It was confirmed that the insurer is not obligated to renew under this agreement, this issue will be added to the Broker Insurer Forum as above.

Drink Driving Exclusion Clause
The Panel discussed moral issues and asked how different is this to someone driving at excess speed. BIBA encourage brokers to check all policy wordings for such exclusions or restrictions. BIBA will contact different insurers for views and once a response is received BIBA will prepare a briefing document.

Driving Licence issues
A number of enquiries have been received regarding failure to renew a photocard licence and its potential for invalidating policy cover. AB to draft a technical briefing. 

BIBA has been contacted by Shreya Ganapathy about an annual European telematics conference which next year will be held in London – the agenda has been provided. GT and SF had a conference call with Shreya as the conference organisers would like BIBA to be involved. BIBA will make further enquiries about a Telematics scheme. 

Signposting – Motor Agreement
There is a draft agreement between BIBA, the ABI and Government which says if a regulated entity is not able to sell motor or travel insurance to a customer due to their (older) age then they should direct that person to a company that can place the policy.. This allows a continuance of risk based pricing. The ABI supports BIBA’s find a broker service and BIBA are recognised as the only suitable signposting service. BIBA will signpost these enquiries to suitable members. 

The IAL letters are still being sent. The uninsured driver numbers have been going down. SD said that insurers are not updating the MID quickly enough and GT will also look into the issues around laid up vehicles.

Winter tyres
The ABI has published a winter tyre commitment for insurers who do not charge additional premiums for fitting winter tyres.