Insurance Post

Plenty to keep the insurance industry occupied in Parliament's final session but what will make it over the finishing line?

The political arguments about the Queen's Speech might still be raging but my plea to the insurance industry is not to be fooled by those into failing to have a good look at what is coming up in Parliament in the next few months. There is an easy trap looming for those inclined to dismiss the the government proposals set out last week as more of an election manifesto than a serious legislative programme. Fall into that trap and you will overlook some bills of major importance to the insurance industry.
Top of that list must be the Flood and Water Management Bill which enacts most of the proposals put forward by Sir Michael Pitt following the serious flooding in the West Country, Yorkshire and Humberside in 2007. This will shoot to the top of the agenda after last week's terrible flooding in Cumbria. Looking through the summary of the main provisions in the bill, it looks as if the insurance industry will be pretty comfortable with what the government is putting forward. The danger will come from attempts to add to it as it goes through Parliament. There is, for instance, a head of steam building up around the National Flood Forum's campaign to force insurers to offer significant premium discounts to householders who install their own flood defences and I expect this to be raised as the bill goes through Parliament.
Also of importance to insurers will be the continuing debate around the Equality Bill and the possibility of specific statutory requirements being imposed on the travel insurance market to prevent age discrimination. This Bill didn't complete its Parliamentary passage in the last session and has been re-introduced with its final House of Commons debate scheduled for 2 December. From there it will go to the House of Lords where travel insurers can expect to be attacked for the scarcity and cost of cover for the over-70s.
It will be impossible to ignore the Financial Services Bill which aims to deliver the government's promises to make the tripartite system more effective by creating a Council for Financial Stability, impose statutory controls on bankers' pay and improve systems for consumers claiming compensation for the failure of institutions or individual products. Among the proposals for better consumer protection are an extension of the remit of the Financial Services Compensation Scheme and a new provision to allow a single representative case to go to court to establish the liability and scope of failure of a product, advice or regulation. Many of the debates on the bill will be high profile as the three main parties attempt to stake out distinctive territory on the future of financial regulation, the City and bankers' pay. That does not mean that there will not be some devil in the detail.
A further piece of legislation for the insurance industry to keep an eye on will be the Civil Law Reform Bill. This is being introduced as a draft bill which means that it is unlikely to make it to the statute book before the General Election. It does, however, contain alot to interest the insurance industry including new proposals for assessing damages following fatal accidents and the long promised reforms of insurance contract law for personal lines promised by the Law Commission.
If this wasn't a long enough agenda a private members' bill has been introduced into the House of Lords by the Labour peer Baroness Quin to make it law to award compensation for pleural plaques. It isn't clear as yet how far this is likely to progress but it has already been given an unopposed first reading and is waiting for a date for a more detailed debate. This will be a difficult one for the insurance industry and will need all the Association of British Insurers' experience and skills in lobbying to put the case against the bill without attracting too much criticism for insensitivity and callousness.
This is a long list of important pieces of legislation that will require alot of input from the insurance industry to ensure that it gets what it wants. It may also find that it has to bid a retreat on some issues, such as age discrimination and travel insurance, if it is not to find itself at loggerheads with public opinion or in the uncomfortable position of attempting to defend the indefensible. The biggest danger, however, is that much of this legislation might be passed in great haste and be poorly drafted as a result. When Gordon Brown finally names the day for the General Election this will initiate frantic negotiations between the parties' business managers to decide which legislation gets forced through in what will then be barely a week left of Parliamentary sittings. This usually means that huge chunks of legislation get passed without any debate or proper scrutiny - inevitably some of that is flawed. It is a very unsatisfactory way of dealing with important issues.
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