June 11 Britain's competition watchdog will
announce on Thursday sweeping reforms of the car insurance
industry that are designed to reduce costs for motorists, the
Financial Times reported, citing sources.
The Competition & Markets Authority (CMA) will introduce a
cap on replacement car costs, saying overly expensive
replacement vehicles cost consumers as much as 180 million
pounds ($302.24 million) a year through higher insurance
premiums, according to the FT's sources. (link.reuters.com/byp99v)
It added that the regulator was also preparing to ban
anti-competitive "price parity" deals, in which insurers reach
exclusive agreements with websites not to offer consumers lower
Tough competition has already driven prices down in
Britain's car insurance market, dominated by companies such as
Aviva Plc, Direct Line Insurance Group Plc and
Admiral Group Plc.
The CMA, which could not be reached for comment outside of
regular business hours, will also crack down on price comparison
websites and propose that insurers improve "often unclear"
disclosure about the terms of no-claims bonuses, the paper said.
Britain's Competition Commission, which was replaced by the
CMA this year, first criticised the complexity in the industry's
claims process and its lack of incentives to keep costs down in
($1 = 0.5956 British pounds)
(Reporting by Richa Naidu in Bangalore. Editing by Andre