Recommendation 8

HM Government · verbatim extract Acknowledged

We note the requirement in the Civil Liability Act 2018 for HM Treasury to report to Parliament in the 2024–25 financial year on the extent to which savings have been passed on to policyholders. Whilst we acknowledge that many factors may impact on the cost of motor insurance premiums, it is vital that the direct effect of the whiplash reforms is properly assessed. We recommend that the Government ensures this process is as transparent as possible, including publication of the submissions made by insurers. Given the whiplash reforms are still bedding in, and the large number of cases still awaiting settlement, we further recommend that the Government conduct a follow-up assessment one year after the publication of its planned review. (Paragraph 50) Civil Liability Act 2018 : Part 3 of the CLA 2018 requires insurance companies who sell motor policies in England and Wales to provide the Financial Conduct Authority (FCA) with data and information to enable a thorough review of the impact of Parts 1 and 2 of the CLA 2018 on insurance policy holders. Following the completion of the FCA’s review, the provisions in the CLA 2018 also require HM Treasury (HMT) to lay a report in Parliament by no later than 1 April 2025 on savings achieved and how these have been applied to motor insurance policies. MoJ has liaised directly with HMT and the FCA and work is ongoing regarding the evidence gathering phase of this process. A template has been prepared and distributed to relevant insurance companies. The information provided in response, via this template, will be considered by the FCA and they will then work with HMT to produce a report which will be laid before Parliament. We agree with the Committee that it would be difficult to determine the extent to which economic upward pressures have been offset by any savings arising from CLA 2018 reforms. We also agree that this work should be completed in as transparent a way as is possible. However, we do note that full transparency may be affected by the need to protect commercially sensitive data supplied to the FCA for assessment by insurance companies. Next steps : HMT are already working closely with the FCA in respect of the completion of the required statutory savings report. MoJ will continue to liaise with HMT and the FCA and will provide advice and support as necessary as this work moves forward. We also note the recommendation that the Government conduct a follow-up assessment one year after the publication of its planned review. Whilst there is no statutory requirement to complete a follow up exercise we do not disagree with the suggestion. We would, though caution that it is too early to make such a commitment. We will, however, continue to discuss this point with HMT and FCA as their work on the savings report progresses. In conclusion, the Government welcomes the Justice Committee’s helpful report. It considers several issues of importance and is useful in identifying areas where the performance of the important OIC portal system can be reviewed and improved. The Committee has drawn a number of conclusions and made several recommendations for further action. The following section of this memoranda provides a summary of the Government’s position in relation the recommendations made by the Committee in its Ninth Report. The Government does not agree that further action is required regarding the proportion of unrepresented claimants using the OIC service. The OIC provides claimants with a choice as to whether to progress a claim themselves or to seek the support of a legal professional. It is important that this choice is maintained. We will, however, continue to work with MIB, and other stakeholders to identify and implement web optimisation and improve the visibility of the OIC service. In addition, we will continue to work with MIB and representative groups on the OICAG to seek feedback from users of the OIC system. We will also continue to update and refresh all relevant and useful information on GOV.UK. The OIC service is currently operating well for both represented and unrepresented users. MoJ will continue to work with MIB to ensure further appropriate enhancements continue to be made to the service. MoJ agrees that more work needs to be undertaken to better understand the flow of claims through the OIC process. Additional data will be published from January 2024 to help to provide greater clarity on the impact of dormant claims on outstanding claim volumes. MoJ will also continue to work with MIB, CPL, MedCo and the senior judiciary to analyse the different claim journeys, to identify and implement improvements to the claims process. In addition, feedback and evidence from the recent medical reporting consultation exercise will be considered and fed into the work on claims flow. MoJ agree that transparency is important regarding the production of the statutory savings report and will work with HMT and the FCA in this regard, taking due notice of commercial