Lord Keen promises to hold insurers accountable for their commitments to pass on savings as a result of the Civil Liability Bill
The government will check to make sure insurers pass on any savings they make as a result of the personal injury reforms currently making its way through parliament.
It had previously been suggested that the government would look to industry forces to regulate pricing and see savings are passed on.
The Civil Liability Bill is due to have its first reading in the House of Commons next week and is believed to cut the cost of claims for insurers, allowing them to lower premiums for its customers.
Originally, the average saving for each customer was said to sit between £35-£50 per year, but claimant lobbyists, Access 2 Justice have scrutinised that figure and said the savings are more likely to sit around £16 per year.
But now, Lord Keen of Elie says the Ministry of Justice will bring forward an amendment to the bill as soon as possible that will hold insurers to a greater accountability.
He said: ”Insurers should be accountable for meeting their commitments to pass on savings from the reforms.
”Therefore, we have also committed to developing an effective means for reporting on the savings made by the insurance sector being passed on to consumers, making sure that insurers are held to account.”
An impact assessment, published by the government, for the bill shows insurance firms can expect overall savings of around £1.3bn a year through reduced claims numbers and smaller payouts.
Insurers have said that around 85% of these savings will be passed on to policyholders, giving insurers a net windfall of £190m a year.
Changes are expected to come into force by April 2019.