Industry faces motor insurance regulation threat

The insurance industry faces the threat of further statutory regulation unless it agrees measures that will cut the cost of motor policies, Insurance Times has learnt.

Insurance Times can reveal that justice secretary Ken Clarke is sympathetic to his predecessor Jack Straw’s push to reform the regulation of motor insurance.

Straw is currently piloting through the House of Commons a ten minute rule bill on motor insurance regulation. This proposes banning referral fees, slashing solicitors fees and an end to post code risk pricing.

At an ‘I Love Claims’ debate last week, Straw warned the industry that it needed to gets its act together on issues like referral fees or else.

He said: “Unless the public sees a cut in its premiums there will be tougher action to follow. I don’t think it will be possible to dodge and weave and think this will go away: you will see cross party support for a  statutory regulator.”

Market research firm Consumer Intelligence managing director Ian Hughes, speaking at the same event, backed Straw.

He said: “If you don’t change you are going to get legislation and consumers are going to love it because it will bring premiums down.”