Latest addition gives a shot in the arm to pact between insurers and credit hire operators
Suddenly the future of the ABI credit hire pact doesn’t look so shaky. The General Terms of Agreement (GTA) suffered a blow when AXA, keen to wrestle back control from credit hire operators, pulled out last month. Although Chaucer doesn’t quite pack the same punch as AXA, its admission is still a significant morale boost to members.
It gives a significant impetus for the GTA for two reasons.
Firstly, it shows that insurers still believe in the structure. While the exit of AXA and the various splinter pact agreements between insurers and credit hire operators (CHOs) may erode the GTA, the entry of Chaucer will show the remaining insurers – who make up the bulk of the market – that the GTA still has some attraction. After all, do they really want a Government-led solution which could involve costly red tape?
Secondly, it proves that the improvements at the GTA are having an impact. The election of an independent chairman to arbitrate disputes was seen as ‘very positive’ by Chaucer. The GTA has shown its adaptability and a willingness to evolve, that is an achievement in itself.
Despite this, the GTA is still only a voluntary agreement and as such, is always under threat of members exiting and making it worthless. Under the GTA, disputes should be settled within 28 days, but so frequently cases end up in court having surpassed the 90 day period. The usual arguments swish around time and again, with CHOs complaining insurers fail to settle and insurers moaning that’s because CHOs add on extra hire days and surplus costs.
Only time will tell if the structure can withstand such friction.
