Daily Insurance Industry News
 
 
Daily Insurance Industry News
Tuesday 17th of July 2018
July 12, 2007

Compensation Act impacts on claims farming

by Gill Montia

Story link: Compensation Act impacts on claims farming

According to Mark Boleat, head of regulation at the Ministry of Justice (MoJ), the Compensation Act has had the desired impact on cold calling and claims farming activity amongst firms providing legal services to bring compensation claims.

The Act, which came into force in April, is regulated by the Department for Constitutional affairs and has required hundreds of companies involved in claims management to become regulated for the first time.

In his speech at the Insurance Times Future of Personal Injury Claims Conference, Mr Boleat reported that whilst cold calling had been largely halted, more work needed to be done in certain areas, for example cold calling in areas of poor social housing.

He believes that regulation of the Claims Management sector has dealt effectively with unauthorised marketing in hospitals, which has decreased by between 80 and 90%.

The regulator will continue to give priority to accident management companies suspected of being involved in contrived accidents; two businesses have already been refused authorisation and a number of others are being investigated.

It is no surprise that the insurance industry has co-operated wholeheartedly with the new measures; a senior fraud practitioner from Zurich has been seconded to the Department for Constitutional affairs to help regulate the activities of claims management companies.

The Act has also impacted on malpractice by companies handling claims against the Criminal Injuries Compensation Authority, with some firms voluntarily leaving the market.

 

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