A joint Cila/ABI working party has been established to work on a new claims code after the Treasury ruled that loss adjusters will not be directly regulated.

Cila president Michael Burnett said that the working party, to be chaired by Norwich Union's director of technical claims David Hooker, was due to meet for the first time in the next few weeks.

"The ABI recognises that the claims code it has at the moment is not appropriate," Burnett said.

Cila and the ABI will liaise with the Treasury in the development of the new claims code, which will prevent loss adjusters from having to deal with a raft of different rules and interpretations of regulation from insurers.

Burnett said the potential for Cila to be granted authority to regulate its members was also being explored.

In announcing the outcome of its consultation document Regulating Insurance Mediation, last week, the Treasury ruled that claims handling by intermediaries on behalf of insurance companies, expert appraisal and loss adjusting would not be regulated by the FSA

"This is because the FSA has some powers over insurers in relation to excluded activities in any case, and because there is not clear evidence of significant consumer detriment," the Treasury ruling said.

Burnett said that despite lobbying for direct regulation he was not disappointed with the decision. "All of the indicators to date were that it wasn't likely to happen," Burnett said.

The Treasury was required to rule on the regulation of loss adjusters because loss adjusting is not included in the EU's Insurance Mediation Directive, on which the UK's insurance industry regulation is based.