Attention is fixed on the general election campaign, but insurers should also keep track of two bills going through the legislative process

On the basis that this will probably be my last contribution to Insurance Times before the general election, I would like to highlight some issues that are likely to come to the fore.

It is impossible to predict the outcome of the election with any certainty, but even some of the current government’s own supporters are concerned that it appears to be running out of steam. Nonetheless, before the election takes place, parliament has to deal with the vestiges of that government’s last legislative programme.

At the time of writing, there are at least two bills of obvious and pressing concern to the industry. The first is the Equality Bill. This has traversed a long road already and I believe that, although it is a long way from ideal, it is far from being as damaging to the interests of the industry as we once feared it might be.

Most aspects of it will affect all walks of life equally, but it is critically important that those parts dealing with age discrimination in particular do not make it impossible for insurance firms to continue operating on a realistic basis.

The battle is not yet over, but I am hopeful that the industry will now be able to live with this legislation at the forthcoming Report Stage – so long as certain other elements of clarification are obtained.

Of even greater concern are the later clauses of the Financial Services Bill. This has been delayed by the introduction of emergency legislation to deal with seizure of the assets of suspected terrorists. But during the next few weeks members of the House of Lords will have to consider proposals that would introduce far-reaching and novel proposals for US-style opt-out class actions.

This Bill seeks to introduce opt-out class actions and would potentially expose financial services institutions and professionals to a barrage of unmeritorious claims.

This would materially affect insurers as retailers and distributors of insurance products and services, and also as writers of professional indemnity cover for financial services professionals. Sadly, the Bill remains silent on some of the most significant potential aspects of such actions.

In a long political career, I have become all too familiar with the law of unforeseen consequences, and we must not allow ourselves to be harried and rushed into accepting anything that is against the national interest.

The breadth of the existing proposals potentially widens the exposure to claims of a wide range of insurers and brokers directly, and the insurers of financial services institutions and professionals indirectly. The Bill as it stands would also entrench the tripartite regulatory system the Conservative Party has pledged to replace.

As the election approaches, both of these bills may become part of what is known as the “wash up” – to discuss which legislation should be allowed onto the statute book in the dying days of a five-year parliament.

In that febrile atmosphere, anything might happen, but I do sincerely hope that the interests of this crucially important industry are protected and advanced.

After that, it will be for the voters to decide. IT

Lord Hunt is a partner and chairman of the Financial Services Group at national commercial law firm, Beachcroft