We read with interest the letter from Roy Rodger (Letters 31 August 2006). Article 75 is of course part of the Motor Insurers' Bureau's (MIB) articles of association and consequently is binding on all its members. Any amendment to it is subject to agreement of all members by virtue of a vote at a general meeting.
The effect of Article 75 is to oblige an insurer to deal from its own funds with an uninsured claim where the insurer has no obligation under the policy or under the Road Traffic Act. It is, therefore, merely a device for sharing the cost of uninsured driving on a claim-by-claim basis, as opposed to the levy which shares the cost of uninsured driving in proportion to the size of members' motor accounts.
Should members decide that it is more appropriate and equitable for these uninsured cases to be dealt with by the MIB and the cost shared through a levy - it is true that there will be an inevitable increase in the levy - the cost to the market as a whole should remain neutral as there would be a consequent fall in claims spend by insurers not having to deal with these uninsured cases.
Part of the review of Article 75 is looking at the potential of any financial impact, although the MIB has not seen any data suggesting that the numbers of these claims are equivalent to those uninsured cases that the MIB already handles.
In fact, on the available information, the number of cases would appear to be small. The MIB has certainly not seen any data suggesting anything remotely approaching doubling of the levy, as suggested by Mr Rodgers.
Article 75 has served a purpose, but with the process changes flowing from the use of the motor insurance database and the need for the industry to be able to measure the level and cost of uninsured driving it is time for a fundamental rethink.
The review that is currently underway is being conducted by representatives from a range of motor insurers whose intention is to produce a consultation paper for consideration by all members before making any proposals to the MIB board for a revision to Article 75. Mr Rodgers can rest assured that the board does not consist of insurance claims practitioners.
Trevor Harrison
Head of technical
MIB
