insurancepeople
News
FSA“seeking to disregard basic principle ofUKlaw” C
ity law firm Reynoolds Porter Chamberlain LLP comments that the FSA is seeking to
“disregard a basic principle of UK law”, in trying to force financial services firms to provide 100% redress to customers who have suffered financial loss, even if the loss was
Brit in transatlantic alliance to combat cargo crime
theft prevention and recovery network, CargoNet, providing policyholders with emergency and practical assistance where a driver is a victim of cargo theft in the US, where reported cargo thefts are predicted to exceed $30 billion in losses each year. With CargoNet backing, high visibility warnings are affixed to cargo trucks, and drivers are supported with a 24/7 emergency response command centre capable of launching a co-ordinated notification and recovery process with law
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enforcement agencies and task forces, regardless of the state where the incident occurred.
There is also a real-time national database of maps of all such incidents, and a risk management tool aiming to help transportation
managers plan safest routes. 24 insurancepeople NOVEMBER 2011
rit Insurance has joined the US-based cargo
not caused by the firm’s rule breach or faulty advice.
RPC says that, if parliament accepts the FSA invitation to change the law, firms will be strictly liable to compensate customers for all financial losses when their actions have breached the FSA
rulebook, no matter how small the breach.
Simon Laird of RPC says, “Small breaches in documenting advice, such as failing to send the customer a suitability report, rarely impact investment decisions but could mean the firm is liable for the customer’s
“Misunderstanding” over winter tyres
W
ith another harsh winter possibly looming, some car manufacturers and tyre companies are advocating the fitting of winter tyres. But the AA refers to last winter’s “confusion”, when some insurers considered their fitting to be a “modification”, warranting an increased premium or even withdrawal of cover.
Simon Douglas, director of AA Insurance, says, “I believe that this was a misunderstanding by some insurers. It is ludicrous for an insurer to penalise a driver for fitting winter tyres, given that doing so both underlines a responsible approach to road safety by the driver as well as reducing the likelihood of a collision.” He adds that, provided the winter tyres and wheels to which they are fitted meet the car manufacturer’s specification and are fitted professionally, there should be no need to inform the insurer.
total losses from a financial product if the FCA is granted this power. “Effectively these
changes to the law could encourage customers who were perfectly aware of the risk they were taking to look for a loophole through which to claim compensation.”
Government
evidence session on the cost of motor insurance, the Law Society says that government reforms will benefit only the insurance industry, with changes to no-win, no-fee arrangements “unlikely to reduce premiums for consumers”.
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Making conditional fee arrangements more difficult for ordinary people to use will “effectively remove access to justice for millions of middle income, middle England families who are victims of accidents, fraud, negligence, injustice and other wrong doing”, says the society. The Law Society chief executive Desmond Hudson says, “The government has not only bowed to pressure from insurers but it has also fallen for the propaganda about the so-called ‘compensation culture’. This is something for which no credible evidence exists.”
reforms “to benefit insurance industry”
esponding to a Transport Select Committee
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