Overview

The Motor Insurance Regulation Bill aims to reform the motor insurance market in England and Wales. Key changes include banning referral fees in personal injury claims, setting new standards for whiplash claims, updating the pre-action protocol for such claims, and regulating how insurers use location data for risk pricing.

Description

This bill makes several key changes to motor insurance regulations:

Referral Fees

It makes it illegal to pay or receive referral fees related to personal injury road traffic claims. Breaking this law could result in a significant fine or imprisonment.

Whiplash Claims

The bill raises the burden of proof for whiplash claims. Claimants must provide objective evidence of injury; subjective descriptions alone are insufficient. A presumption of no injury exists if the accident involved a low-speed collision (15mph or less) and there are no musculoskeletal signs of injury.

Pre-Action Protocol

The bill amends the existing pre-action protocol for low-value personal injury claims, setting new fixed cost levels for different stages of the claims process. Future amendments to these costs will require parliamentary approval.

Risk Pricing

Insurers are prohibited from using location data smaller than an English region or Wales to determine risk levels for personal injury claims. However, factors such as age, occupation, claims history, and vehicle location (only for theft risk assessment) can still be considered.

Government Spending

The bill's direct impact on government spending is not explicitly stated. However, it aims to reduce fraudulent and inflated claims, potentially leading to savings in the long term for the government and insurance companies.

Groups Affected

• Motorists: May see changes in insurance premiums due to the risk pricing regulations and potentially lower claims costs.
• Claimants: Face stricter requirements for proving injury in whiplash claims.
• Solicitors and Claims Management Companies: Will be affected by the ban on referral fees and changes to claim processes.
• Insurers: Must adjust their risk assessment and pricing practices to comply with the new regulations.

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