Insurance bosses met the Chancellor Philip Hammond yesterday to ask him to intervene in cutting of the discount rate in personal injury claims.
Source: Mortgage Finance Gazette
The announcement by the Lord Chancellor Liz Truss that the discount rate would be cut from 2.5% to -0.75% triggered predictions from insurance experts that premiums for young drivers could rise by up to £1,000 a year.
The ABI said that estimates also suggest that it could cost the NHS around an extra £1 billion a year in compensation bills.
Attending the meeting were the CEOs of 15 of the UK’s biggest motor and commercial liability insurers who called for a swift change in the law through the Prison and Courts Bill to stop the change hitting motorists, businesses and taxpayers.
Following the meeting a joint statement was issued by the chancellor and Huw Evans, director general of the Association of British Insurers: “Claimants must get the money they’re entitled to following an injury in order to support their future needs.
“It is important that going forward, personal injury discount rates are set at a level that is fair to both claimants and consumers.
“The government will progress urgently with a consultation on the framework for setting future rates, and bring forward any necessary legislation at an early stage.
“The industry will contribute fully to the upcoming consultation, and the government will carefully consider all evidence and arguments submitted.”