Car insurance firm market probe

The Office of Fair Trading (OFT) is to refer the private motor insurance market to the Competition Commission for practices that, it claims, drive up the cost of premiums.

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'Referral and excessive hire fees need to be abolished'

Nick Starling, the head of general insurance at the Association of British Insurers, has said he hopes the Competiton Commission will look into some of the "dysfunctional" practices in the motor industry. He told BBC Radio 4's Today programme:

The whole market is ... dysfunctional ... There are structural issues here that only the Competition Commission can look at.

When pressed on which issues needed resolving, he said that referral fees to insurers needed to be abolished. He also mentioned clamping down on excessive hire fees and ensuring that replacement vehicles are equivalent to the car that was damaged, not more expensive.

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