Posted 08 July 2015 by Donna Scully
Chancellor George Osborne announced ‘major review’ of the regulation of CMCs in the unveiling of the summer budget, pledging to cap the amount CMCs charge to their customers.
IFB director Ben Fletcher said “There are many genuine claims management companies which provide a service for honest consumers and this must be preserved. However there is equally a need to recognise that corrupt CMCs are a significant factor in organised insurance fraud and work needs to be done to improve regulation.”
He added “a major review of the regulation of this industry to improve transparency and to implement robust processes which will enable the detection of corrupt practices is absolutely welcomed.”
In response to the announcement of an increase in IPT from the current 6% to 9.5% BIBA Chief Executive Steve White said “we are extremely disappointed in this rise in insurance premium tax and will mean insurance will become more expensive for the public as a result, including the 19.6 million households with motor insurance.
The government has been working with the industry to reduce the cost of insurance for consumers and it therefore seems counterintuitive to be taking measures which will add to the cost, effectively taxing protection.”
The hike in IPT comes in to effect from 1st November and could create uncertainty and unnecessary cost for businesses but we are yet to see the detailed measured proposal. It is the second biggest revenue raising measure announced in this year’s budget.