An overload of acronyms, as MoJ & HMT issue ToR for CMC review

Two points in the Chancellor’s summer budget would probably have come as a surprise to those involved in insurance business.

The increase in premium tax from 6% to 9.5% for polices written after 1 November 2015 will hardly have been welcomed. The Treasury expects this to raise half a billion pounds in the 2015/16 financial year and around one and a half billion pounds annually in future years. The lead-time was really quite limited, with 1 November less than four months after the Chancellor’s budget speech in early July. We might have expected an April 2016 implementation of this new tax rule, given that Government reforms tend to attach on either 6 April or 1 October of each year (these being known as “common commencement dates”). One very plausible explanation for the adoption of a 1 November for the higher IPT rate is that it will allow the Treasury to collect higher rate of IPT on the vast numbers of policies renewing on 1 January and on 1 April 2016.

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Showing its teeth: Claims Management Regulation team imposes hefty fine on CMC

The Government changed the law in December 2014 to allow the industry’s watchdog to issue fines for noncompliance with the applicable regulations. On 13 July the Claims Management Regulator’s (CMR) latest annual report 2015 made clear that if Claims Management Companies (CMC) failed to comply with the CMR’s rules of conduct, a full range of enforcement tools would be used. It hasn’t taken long for the CMR to issue its first fine, on 5 August, of nearly a quarter of a million pounds. The regulator’s target was a CMC that processed hearing loss claims.

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