§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions what assessment he has made of the last six months of problems for small and medium sized enterprises caused by the recent increases in insurance premiums. [132843]
§ Malcolm WicksA survey by the Office of Fair Trading (OFT) found that price increases were most concentrated on a limited number of companies. Nearly half of all companies had no price rise or less than 20 per cent. However, between 5 per cent. and 12 per cent. of businesses saw premiums at least double and often increase by several hundred per cent. More recent figures from Datamonitor, a leading business information company, show less extreme pricing trends than the OFT survey but support the general picture. Overwhelmingly, these were small and medium sized companies, mostly in sectors traditionally associated with high accident risks.
In the First Stage Report of the Review of Employers' Liability Compulsory Insurance (ELCI) the Department noted that many SM Es have faced real difficulties including:
reduced profit margins tied to an inability to pass on increased costs, with a potential knock-on affect on business investment;curtailment of business activity in some sectors deemed to be too high risk by insurers;difficulties with business planning caused by uncertainty;according to some business representatives, being forced to make staff redundant or reduce rates of pay;anecdotally, the linking of increased EL premiums to business failure; and reports of trading uninsured.The Department has been looking at ways of alleviating the difficulties in the Second Stage of the Review and will report in the autumn on the progress that has been made and on the further steps that we intend to take.
628W
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions what discussions his Department has had with the insurance industry over the past six months regarding the issue of notice periods for the renewal of employers liability insurance; and what the outcome of such discussions was. [132844]
§ Malcolm WicksThe Department has had a number of discussions with the Association of British Insurers (ABI) and the British Insurance Brokers' Association (BIBA) about Employers' Liability Compulsory Insurance (ELCI) over the last six months. The discussions covered a range of issues including the issue of notice periods for the renewal of ELCI.
The ABI and BIBA recently announced a statement of good practice, which recommends that liability insurance policy holders receive at least 21 days' notice of their renewal terms.
The Department welcomes the initiative on the part of the ABI and BIBA.
In addition, the Financial Services Authority (FSA) has recently consulted on whether it should set an 'in good time' requirement or a 21 day notice period for renewals for commercial customers, and is currently considering responses to its consultation.
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions if he will set out in his Department's second report into Employers Liability Compulsory Insurance a list of trade organisations that he has met. [132848]
§ Malcolm WicksYes.
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions what criteria his Department will use in deciding the content of the follow-up report on Employer's Liability Compulsory Insurance due for publication in the autumn. [132854]
§ Malcolm WicksThe content of the Second Stage Report will accord with the commitments given in the First Stage Report, namely that the Department will continue to monitor developments in the Employers' Liability Compulsory Insurance market and will report on the progress that has been made against the agenda for action that was set out in the First Stage Report. The agenda for action comprised
629Wworking with interested parties to help develop the basis for more risk-related premiums;working with stakeholders to maximise the benefits for EL of current initiatives within the legal system. In parallel, discussing with stakeholders the options for alternative dispute resolution arrangements;engaging with business, industry and other stakeholders to further evaluate the evidence for separating long-term occupational disease risks from accident risks—more evidence would be needed to assess whether a radical separation is justified;making rehabilitation play a more central role in the UK workers' compensation system, to improve outcomes for employees and to let compensation reflect this;reforming the arrangements for enforcement of EL, to tackle the unfairness of competition trading illegally without insurance cover and to better protect employees.
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions what assessment his Department has made on the impact of long tail insurance on the level of premiums. [132892]
§ Malcolm WicksThe Department is aware that the Association of British Insurers (ABI) has commissioned research to develop proposals in this area. We have discussed this with the ABI and other stakeholders. We await the results of the research with interest.
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions pursuant to his answer of 18 September,Official Report, column 904W, to the hon. Member for Broxbourne (Mrs. Roe), when he expects the follow-up report on employer's liability compulsory insurance to be published. [132904]
§ Malcolm WicksI refer the hon. Member to the answer given to the hon. Member for Broxbourne (Mrs. Roe) on 18 September,Official Report, column 904W. The position remains the same.
§ Mr. BellinghamTo ask the Secretary of State for Work and Pensions pursuant to his answer of 18 September 2003,Official Report, column 904W, to the hon. Member for Broxbourne (Mrs. Roe), what steps his Department is taking to make an assessment of the number of small and medium sized enterprises that have stopped trading in the past 12 months as a result of increased insurance premiums. [132905]
§ Malcolm WicksI refer the hon. Member to the answer given to the hon. Member for Broxbourne (Mrs. Roe) on 18 September,Official Report, column 908W. The position remains the same.