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EMPLOYER'S LIABILITY COMPULSORY INSURANCE REVIEW DETAILS

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Nick Brown, minister for work has today confirmed the terms of...
Nick Brown, minister for work has today confirmed the terms of

reference for the review of Employer's Liability Compulsory Insurance

(ELCI) which was announced by the chancellor in his Pre-Budget

Report.

The Review will be led by the Department for Work and Pensions which

will be working closely with other government departments including

HM Treasury, DTI and the Lord Chancellor's Department.

In the Pre-Budget Report in November 2002 the government noted the

problems that many employers have faced this year in securing this

insurance. The purpose of the Review is to assess the case for

reforming ELCI and if such a case is demonstrated, to identify the

objectives and options for that reform.

The terms of reference for the review are:

- Survey the operation of Employer's Liability Compulsory Insurance

(ELCI), taking into account any relevant aspects of the state

benefits systems.

- Assess the scale and nature of the current difficulties being

experienced in relation to ELCI, in particular the extent to which

these difficulties are likely to be short-term only, repeated in

the future or permanent.

- Make recommendations to ministers as to the case or otherwise for

reforming ELCI.

- If a case for reform is found, make recommendations as to the

objectives, principles and high-level options for such reform.

Commenting on the Review minister for work, Nick Brown, said:

'The government has been monitoring the operation of ELCI and has

noted the need for a review. We will be working closely with all

stakeholders on this review that will report to ministers in spring

2003. We will continue to work closely with insurers, brokers and

businesses to ease the existing pressures in the meantime.'

Notes

1. Stakeholders will be asked to submit their written views to the

review team as to the long-term commercial sustainability of ELCI;

the economic efficiency of the operation of the present system; the

impact of the current system on employers, including whether it

incentivises good health and safety management; and the extent to

which the system meets the needs of affected employees and encourages

their rehabilitation. The closing date for these contributions will

be Monday 17 February, 2003

2. The department welcomes the work the Office of Fair Trading is

carrying out on liability insurance which will help to develop

understanding of the market. DWP will be keen to take account of the

OFT's findings in its own work on ELCI.

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