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Status: You are viewing the version of the handbook as on 2005-06-30.

ICOB 7.6 Motor vehicle liability insurers: claims representatives

ICOB 7.6.1G
  1. (1)

    Under threshold condition 2A (Appointment of claims representatives), if it appears to the FSA that any person is seeking to carry on, or is carrying on, motor vehicle liability insurance business, that person must have a claims representative in each EEA State other than the United Kingdom.

  2. (2)

    If any person carrying on motor vehicle liability insurance business becomes aware, or has information which reasonably suggests, that that person has failed to satisfy, may have failed to satisfy or may not in the foreseeable future be able to satisfy, threshold condition 2A (or any threshold condition), that person must notify the FSA immediately (see SUP 15.3.1)

ICOB 7.6.2R

The Society must ensure that no member carries on motor vehicle liability insurance business at Lloyd's unless a claims representative has been appointed to act for that member in each EEA State other than the United Kingdom, with responsibility for handling and settling claims arising from an accident in the cases referred to in Article 1 of the Fourth Motor Insurance Directive.

ICOB 7.6.3R
  1. (1)

    When a motor vehicle liability insurer appoints a claims representative, it must give the MIIC, and each other information centre, the claims representative's name, business address, telephone number and effective date of appointment within ten business days of that appointment being made.

  2. (2)

    If the information at (1) changes in any material way, the motor vehicle liability insurer must be given the MIIC, and each other information centre, details of that change within ten business days of the change

ICOB 7.6.4R

A motor vehicle liability insurer must ensure that each claims representative is:

  1. (1)

    resident or established in the EEA State for which it is appointed;

  2. (2)

    capable of examining cases in the official language or languages of the EEA State of residence of the injured party;

  3. (3)

    responsible for, and has sufficient delegated authority from the motor vehicle liability insurer for which it is appointed, to be able to:

    1. (a)

      handle and settle;

    2. (b)

      collect all information, and take all measures, reasonably necessary to negotiate a settlement of; and

    3. (c)

      represent, or arrange appropriate representation for, the motor vehicle liability insurer (whether in negotiations, in court or otherwise) in relation to;

    claims, arising from an accident occurring in an EEA State other than the EEA State of residence of the injured party, involving the use of a vehicle insured and normally based in an EEA State.

ICOB 7.6.5G

ICOB 7.6.4 R(3) does not prevent a claims representative from seeking additional authority or instructions from a motor vehicle liability insurer, if its existing authority or instructions are insufficient to allow it to handle and settle a claim. However, it does prevent a claims representative from purporting to decline to deal with, or transfer responsibility for, claims properly referred to that claims representative by an injured party, or an injured party's representative.

ICOB 7.6.6G

Nothing in the rules and guidance at ICOB 7.6 prevents, or is intended to prevent:

  1. (1)

    a motor vehicle liability insurer from appointing more than one claims representative in one, or more than one, EEA State; or

  2. (2)

    a claims representative from acting for more than one insurer or member; or

  3. (3)

    a representative, appointed by a motor vehicle liability insurer under SUP 13.5.2 or regulation 3(d) of the EEA Passport Rights Regulations, from acting as that motor vehicle liability insurer's claims representatives as well.

ICOB 7.6.7G

The appointment of a claims representative does not in itself constitute the opening of a branch or the creation of an establishment (see article 4(8) of the Fourth Motor Insurance Directive).

Motor vehicle liability insurers: claims handling

ICOB 7.6.8R
  1. (1)

    Within three months of receipt of a claim for damages from an injured party, or his representative, the motor vehicle liability insurer must (directly, or through a claims representative):

    1. (a)

      make a reasoned offer of settlement if liability is admitted and damages have been fully quantified; or

    2. (b)

      provide a reasoned reply to the points made in the injured party's claim if liability is denied, or not admitted, or the claim for damages has not been fully quantified.

  2. (2)

    If liability is initially denied, or not admitted, within three months of any subsequent admission of liability, the motor vehicle liability insurer must (directly, or through a claims representative) make a reasoned offer of settlement, if, by that time, the relevant claim for damages has been fully quantified.

  3. (3)

    If an injured party's claim for damages is not fully quantified when it is first made, within three months of the subsequent receipt of a fully quantified claim for damages, the motor vehicle liability insurer must (directly, or through a claims representative) make a reasoned offer of damages, if liability is admitted at that time.

  4. (4)

    A claim for damages will be fully quantified under (1)(a), (2) or (3) when the injured party provides written evidence which substantiates or supports the amounts claimed.

ICOB 7.6.9R
  1. (1)

    If the motor vehicle liability insurer, or its claims representative, does not comply with ICOB 7.6.8 R(1)(a), (2) or (3), the motor vehicle liability insurer must pay simple interest on any damages eventually paid, unless interest is awarded by any tribunal which determines the injured party's claim.

  2. (2)

    If (1) applies, the amount of interest that the motor vehicle liability insurer must pay must be calculated as follows:

    1. (a)

      the interest calculation period begins three months after:

      1. (i)

        receipt of the claim for damages, if the motor vehicle liability insurer or its claims representative breaches ICOB 7.6.8 R(1)(a); or

      2. (ii)

        any subsequent admission of liability, if the motor vehicle liability insurer or its claims representative complies with ICOB 7.6.8 R(1)(a) but breaches ICOB 7.6.8 R(2); or

      3. (iii)

        the subsequent receipt of a fully quantified claim for damages, if the motor vehicle liability insurer or its claims representative complies with ICOB 7.6.8 R(1)(a) and (2) but breaches ICOB 7.6.8 R(3); and

    2. (b)

      the interest calculation period ends on the date when the motor vehicle liability insurer pays compensation to the injured party, or the injured party's authorised representative;

    3. (c)

      the interest rate to be applied throughout the period in (a) to (b) is the Bank of England's base rate (from time to time), plus four per cent.

ICOB 7.6.10R

A motor vehicle liability insurer will be taken to have received a claim, or a fully quantified claim, for damages when that claim, or fully quantified claim, for damages is delivered to the motor vehicle liability insurer, or a claims representative, by any person by any method of delivery which is lawful in the motor vehicle liability insurer's, or its claims representative's, respective State of residence or establishment.

ICOB 7.6.11G
  1. (1)

    ICOB 7.6.8 R to ICOB 7.6.10 R apply only to claims for damages for loss or injury suffered in, or as a result of, an accident which occurs in an EEA State other than an injured party's usual state of residence, which is caused by the use of a motor vehicle insured and normally based in an EEA State.

  2. (2)

    The rules and guidance atICOB 7.6.1 G to ICOB 7.6.10 R are not intended to, and do not, restrict any rights which the injured party, or its motor vehicle liability insurer, or any other insurer acting on its behalf, may have and which would enable any of them to begin legal proceedings against the person causing the accident or that person's, or the motor vehicle's, insurers.