Scheme delayed until new year but insurers fear remit could be eventually extended

The implementation of a scheme allowing the NHS to recover millions of pounds of treatment costs from insurers has been postponed until January.

The NHS injury costs recovery (ICR) scheme, which would require insurers to pay the NHS costs of employers' liability (EL) and public liability (PL) claimants, was due to be implemented in October. It has already been put on hold several times.

At present, insurers are charged for the NHS costs of treating road traffic accident victims, which is estimated to cost the industry £105m a year.

According to a Department of Health spokesman it was delayed because of concerns that an amendment needed to the Health Bill would not receive Royal Assent until after the summer recess.

The proposed ICR plans, which are an extension of the road traffic accident scheme, will introduce a new fixed rate tariff covering ambulance journeys directly relating

to the injury for which compensation is received.

Experts predict the extension will cost the insurance industry £150m a year, putting pressure on EL and PL premium rates. Some suggest increases of as much as 8% could be expected.

There are also fears that the government might extend the scheme, if successful, to all NHS recovery costs.

Bob Rabbitts, technical claims manager at Allianz Cornhill, said: "Deferring the scheme is just delaying the inevitable for the insurance industry. Underwriters will need to be aware of extra costs that will arise in the future and be thinking about the effect this might have on rates.

"And at a later stage will we then see the introduction of recovery charges for police and the fire brigade?

"Without wishing to sound pessimistic it's important for insurers to look ahead and anticipate what could happen."

The Department of Health was unable to comment on whether other departments may consider similar recovery arrangements.