IFB welcomes recommendations into regulation of Claims Management Companies
18 March 2016
The Insurance Fraud Bureau (IFB) has welcomed the final report into the regulation of Claims Management Companies (CMCs) issued on 16 March. The recommendations from the review, which was commissioned in 2015 and led by Carol Brady, have also been accepted by the Government in the 2016 Budget.
The recommendations highlight the importance of increased regulatory measures for the claims management industry. IFB’s operational experience clearly demonstrates that there are currently too many criminals operating claims management companies for fraudulent purposes. We welcome the recommendation to re-authorise all firms who wish to operate under the new, more robust regime as it will not only help to reduce fraud, but more importantly go a long way to protect honest consumers.
IFB have previously stated that the existing team at the Claims Management Regulator (CMR) do a great job with the powers that they have. The recommendation to retain as many of the existing staff, whilst also bolstering that with the addition of FCA resources seems sensible, and we are glad to see that there are plans to extend the use of some of the existing powers.
A number of the recommendations in the report indicate a desire to move the operation of these firms closer to the controls that are common place with insurers. Specifically the recommendations referring to mandatory training and recording of all calls would be seen as a significant step in driving far greater awareness and accountability.
Ben Fletcher, Director of the IFB, said: “Whilst there are many genuine CMCs out there, there are also a corrupt few that are a significant factor in organised insurance fraud. The increased regulation of these companies protects the honest consumer and should ensure that action is taken to investigate those who act unethically.
“In the last two years, the IFB has had over 450 intelligence reports linked to at least one CMC and therefore the recommendations to change the regulation of this industry are definitely welcomed.”