To ask the Secretary of State for Justice, what assessment he has made of the regulation of claims management companies for insurance purposes; and if he will make a statement.
Answered on
10 September 2014
The effectiveness of the regulatory response to claims management companies (CMCs) is under continuous review and the Department’s Claims Management Regulator has stepped up action with a series of reforms, as part of wider action to clamp down on bad practice.
No assessment of claims management regulation has been made specifically for insurance purposes. We have introduced tough new rules to prevent bad business practices as well as increasing regulation fees and are introducing large new fines, of potentially hundreds of thousands of pounds, for CMCs which break the rules.
This follows previous reforms to tackle rogue companies, including a ban on CMCs offering cash and other incentives to consumers to bring claims and the banning of referral fees which used to be paid between no-win no-fee lawyers, CMCs and others for profitable claims.
We are consulting on further changes to create an improved, robust system which will deter unnecessary, exaggerated or speculative claims, ensure the genuinely injured can get the help they need, and drive down the cost of motor insurance premiums.