Are Insurers Exercising Too Much Power?
There is a growing unease in some quarters about the influence which large multinational Insurance companies appear to have on the present UK Government. Many greet the spin that Insurers will pass on savings made by inadequately compensating whiplash victims with a cynical nod of the head. The public especially, the most vulnerable and needy, will not be up to fighting their corner nor be able to afford a lawyer to do so for them. An obsession with ‘proportionality’ often only looking at issues of money rather than, reputation or the need to stand up to financial bullying, often makes pursuing claims unviable. Justice will become a distant memory rather than the very foundation of our society. Costs are expended (often because of Insurance companies’ intransigence and delay) yet cannot be recovered from those insurers.
The above is, in the view of the cynics likely to lead to an increase in executive bonuses and dividends for shareholders, and in due course an increase in tax revenue for the Government rather than a reduction in premiums. They are simply not persuaded that insurance premiums will come down in the medium to long term although there might be some initial savings in the very short term. If there are even minor reductions you can be sure that you will hear about them!
Quite why our Government is so anxious to look after these Insurance giants is unclear. The insurers certainly have the Prime Minister’s ear. There will be those (more cynics) who suspect that the insurers used their (sorry I mean our) pension funds to assist in some way during the banking crisis and this is payback time.
What has not been adequately addressed is the failure to bring into force an Act of Parliament given the Royal Assent on the 25 March 2010 (for those who doubt their maths you read it correctly it was nearly 6 years ago). I refer to The Third Party Rights against Insurers Act 2010. This very important act will give the public the right to claim directly against the insurers of a company which has been struck off or gone into liquidation or administration. It updates the 1930 legislation. It will be of particular value to consumers conned by rogue building companies. Good news for everyone, except of course the Insurance Companies! – But they must not despair for they have friends in high places! You may not be surprised to learn that the Act has never actually been brought into force! You will find it buried deep in the long grass just about to see the light of day but somehow not quite there. Having been holding our breath since 2010 (only a little over 6 years) how confident can we be that the latest indication namely that the Act will actually come into force on 1st August 2016 will prove to be true? We must all appreciate that the Government will be careful not to appear rushed or too hasty!
In the context of an underfunded poorly run NHS one can understand why the Government might want to protect insurers paying out compensation as the Government have to pay out claims and so are members of the same club. They as did their predecessors have also taken our premiums through the tax system. Perhaps they have forgotten to retain and invest those premiums wisely!
Have a safe day folks!