Detailed questions force insurers to act individually

The Office of Fair Trading (OFT) hit insurers with a list of 44 questions they must answer if they want to take part in its liability review.

Insiders said it was unlikely that a consolidated industry response was possible, forcing insurers to work independently of the ABI.

The OFT's liability market review will feed into the Department of Work and Pensions' (DWP) investigation of the employers' liability (EL) crisis.

Insurers must respond to the OFT by the first week of March.

The DWP's investigation will not end until April, but sources have said the government seemed willing to consider "fundamental reform" of the EL system.

Liability experts met Debbie Samosa, the executive overseeing the OFT review, last Friday.

The OFT has also hired Christopher Parsons to concentrate on the technical aspects of the review.

Insurance Times obtained the 44 questions Samosa posed, which covered distribution, competition, rates, packages, claims, reinsurance and brokers.

The questions can be viewed at .

But they bypassed controversial topics such as the performance of liability accounts in recent years and the impact of rising personal injury claims costs.

Royal & SunAlliance (R&SA) technical insurance manager Phil Bell said R&SA was likely to respond independently.

"I think that the OFT would prefer to have a range of data to work on rather than consolidated material, if such a thing did exist," he said.

"It would be a complete nightmare, because everyone records such information differently."

AXA strategy director Nick Todd said he would help in any way he could with the review.

ABI general insurance manager John Parker said that quite a lot of the questions would have to be answered by individual companies.

But he said the ABI would provide information the OFT had not specifically requested, such as the impact of legal fees on claims costs.

Parker also met Gareth Williams, who is overseeing the DWP's investigation.

He said that the DWP concentrated on the sustainability of the current EL system and the other options available.