In a welcome development, the government has confirmed that insurance companies will have to satisfy independent checks to ensure they pass on cost savings from changes to the claims process for low value road traffic accident claims.
The Civil Liability Bill, which has its first reading in the House of Commons next week, will result in significant savings for insurance companies.
While insurers have committed to reducing premiums as a result, it was originally thought that the government would rely on market forces to regulate prices.
Justice Minister, Lord Keen of Elie, has now confirmed that the government is developing a system of reporting to ensure the cost savings are analysed and fairly distributed.
Insurance premium cuts have been a key selling point for the reforms so it is essential for there to be transparency in the whole process.
The Ministry of Justice has promised to table an amendment in the House of Commons that holds insurers to greater scrutiny. We will be watching developments with interest as the Civil Liability Bill must not become a vehicle for insurers to boost their profits.