Government proposal could scrap need to keep insurance records.
A government proposal to scrap the requirement for employers to keep insurance policy records for 40 years could result in decreased payouts from insurers but increased strain on the ABI’s insurance tracing code.
If employers are not forced to keep long-term records, they could struggle to determine which insurer is responsible for paying workers who have suffered a personal injury or disease caused during employment. This means that more insurers are likely to escape payouts.
But the ABI’s voluntary Employers’ Liability Insurance Tracing Code is also expected to come under pressure. The code helps claimants to find otherwise untraceable employers’ liability insurance policies, by circulating enquiries to insurers.
An ABI spokesman said: “We’d like to see the requirement remain in some form. Clearly there could be an issue around the tracing code we run, and it’s something we’ll have to look at.”
He admitted the tracing code has only a 40% success rate. But he said: “It’s not perfect but it’s better than not having it.”
Martin Bare, immediate past president of the Association of Personal Injury Lawyers (Apil), said many insurers have entire departments dedicated to old records. But he warned that larger insurers might lose track of what books they bought years ago following mergers and acquisitions.
He said: “This undermines the already compromised nature of the safety net. The government simply has to annul these regulations because of the weaker safety net, not only for employees, but employers who have to defend a valid claim.”
Bare said the regulations were particularly important for so-called long-tail diseases such as the fatal asbestos-related cancer mesothelioma, which can take 30 or 40 years to develop in the body.
Apil has suggested that the government consider implementing a compulsory electronic database similar to that used to record car insurance, which would automatically record all employers’ liability insurance policies.
The government’s proposal. if successful, it will come into force on 1 October.