I am grateful to the hon. Lady for giving me the chance to put on the record the fact that the Government support the principle that insurers should make payment of valid claims within a reasonable time, and that they should be liable for compensation where appropriate should they fail to do
so. The Government are always looking at ways to support and improve the position of the UK insurance industry, and it is hoped that legislative opportunities will arise to include that measure with other insurance-related provisions.
As the hon. Lady will know, the Government undertook a targeted consultation of insurance industry stakeholders in summer 2014 to assess support for the Bill and for a provision on late payment. The results of the consultation suggested that the late payment provision was not suitable for a Bill going through Parliament under the special procedure reserved for uncontroversial Law Commission Bills. The main arguments against such a provision were that it could lead to speculative litigation, or have the unwelcome effect of being used to exert undue pressure to expedite claim settlement, and those costs have not yet been quantified. Furthermore, adequate customer protections already exist, so the problems of late payment are worse in theory than in practice. The Financial Conduct Authority is currently undertaking a thematic review into the handling of commercial claims, and the issue is being considered from a regulatory angle.
As the hon. Lady recognised, not all recommendations made by the Law Commission are suitable for the special procedure for non-controversial Bills, and that provision was omitted from the Bill specifically to ensure that the special procedure was not abused. I repeat, however, that the Government support the principle that insurers should make payment of valid claims within a reasonable time.
Question put and agreed to.
Bill accordingly read the Third time and passed.