Delays to the electronic delivery of insurance certificates will cost the industry millions
In a market where rates are soft, developments such as electronic delivery of motor insurance certificates could help brokers and insurers significantly reduce their overheads. The legislation would save companies substantial costs in printing, packing and postage, whilst improving the efficiency of service for consumers. But when will this legislation which has already been significantly delayed finally be processed and how much will these delays cost the industry?
Nearly two years on from the proposed legislation, Biba has been told there will be major delays. They estimate that the cost to the industry, in lost efficiency savings, is a minimum of £11 million per year. However, the actual cost to the industry could in fact be significantly higher, with one broker saying they believe the cost saving to their business would be in excess of £1m.
The old adage that time is money, is most relevant. The Parliamentary process to introduce new legislation happens just twice a year and if the new rules are not processed for April 2009, the next opportunity for this reform to take place will not be until October 2009.
Graeme Trudgill, technical corporate affairs executive at Biba is hopeful that the legislation will come into effect next spring but concedes it could be later. With Biba having lobbied the government for changes to the certificates for more than two years it seems that the only option is for the industry to hold tight and remain hopeful legislation will be passed in April next year. Jim Fitzpatrick, road safety minister, has admitted that the introduction of the electronic delivery of insurance certificates will not happen until April 2009 at the earliest.
A spokesperson for the Department for Transport said: “We are taking this forward as quickly as possible but it does require detailed regulation.”
Biba has been in talks with the government for a long time over the delivery of electronic insurance certificates which the Department for Transport announced would be delivered last November. It is understood the delay may have been caused by a logjam in the Department for Transport’s legal section.