§ Mr. Michael McNair-Wilson
asked the Secretary of State for Defence if the will make a statement on the use his Department proposes to make of the commercial insurance market.
§ Mr. Pattie
As I told my hon. Friend the Member for Devon, West (Mr. Mills) in my written reply to his question on 22 December 1981—[Vol. 15, c.369]—a study has been carried out into the activities of the Claims Commission. This has included a comparison of the costs of using the commercial insurance market to perform the work presently done by the Claims Commission, with the costs of doing it "in-house". The results of this study have been analysed, and it is clear that there would be distinct financial and administrative advantages in transferring to commercial insurance this Department's claims work in the United Kingdom in the fields of motor accidents and employer's liability. It has therefore been decided that, from 1 April, new claims which arise in these two areas will be transferred to the commercial insurance market; and insurers and brokers will, in return for an annual premium and associated brokerage fees, handle the work which up to now has been dealt with by Claims Commission staff. These changes will result in significant financial savings to the Exchequer and will involve the saving of some 79 staff posts from my Department over three years.