§ Mr. McCrindleasked the Secretary of State for Trade when the report on the operation of the Policyholders Protection Act 1975 is to be published; and if he will make a statement.
§ Mr. EyreThe report on the review of the Policyholders Protection Act is published today. Copies of the report have been laid before Parliament. Experience of the operation of the Act has been limited: so far, only three cases have been referred to the Policyholders Protection Board.
In May 1980 the Department of Trade invited comments on the operation and effectiveness of the Act. The consensus expressed in the review was that on the basis of the three cases referred to the Policyholders Protection Board, the Act has been shown to be capable of achieving its objectives. Consumer interests, in particular, expressed their continued support for the Act. The main proposals for change related to technical aspects of the operations of the Policyholders Protection Board.
The report concludes that the Act should be retained substantially in its present form, that there is no present case for changes to be made to the scope of the Act, nor to the composition of the Board, and that the level of protection should remain at 90 per cent.
Consideration will be given to amending certain technical aspects of the scheme when a suitable opportunity occurs for insurance legislation. All United Kingdom legislation dealing with the winding-up of insurance companies will need to be reviewed when the EEC directive on the co-ordination of laws, regulations and administrative provisions governing the winding-up of direct insurance undertakings, now being prepared by the Commission of the European Communities, has to be implemented.