reference for the review of Employer's Liability Compulsory Insurance
(ELCI) which was announced by the chancellor in his Pre-Budget
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
- 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
- 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.'
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.