News

Biba Urges Quick End to the “Days of Grace”

9 Dec 2004

The British Insurance Brokers’ Association (Biba) is putting pressure on insurers, in light of the Greenaway Report into uninsured drivers, to speak with a common voice on their “days of grace” period or to risk facing two years of complete confusion.

Biba said that insurers should not confound the market by changing to a range of dates, as has been suggested, or either five, seven, 10 and 14 days.  Instead the association called for a far greater sense of uniformity, with the number of days being set at zero across the board.

Alan Briscoe, Biba motor panel chairman and association director of Aon said: “In general we welcome the report but we do have some pretty serious concerns over the “days of grace” period that has been mentioned in the first of the report’s recommendations.

“The Greenaway Report” was the perfect opportunity for insurers to take a common stance on this issue and make it clearer for both brokers and customers.  However, by taking an interim stance of between zero and 15 days, they have not addressed the problem – which they will have to do anyway in 2008.”

Recommendation one of the Greenaway Report states, “The current widespread practice of condoning any apparent grace period for renewal of lapsed motor insurance policies should be discontinued and insurance providers should enforce the insurance requirement on a continuous basis”.

Allianz Cornhill stated that before July it had a 15 day cover note on Road Traffic Accident Act motor renewals but that this was removed from manual programmes in August.

In addition, the insurer stated that customer newsletters were being prepared detailing these changes, and also recommending that renewal invitations be requested before renewal date.  Brokers should then forward the newsletters to policyholders with their renewal invitation.

Paul Brimble, business standards technician, personal lines, stated, “We recognise that support is required from our brokers in areas other than the timely lapsing of motor policies that have not been renewed.

In view of this fact we have provided strong guidelines in relation to “Day One” submission of manual business and we will be continuing to strongly promote the use of teleprocessing for amendment and cancellation transactions”.

Axa said it is also reviewing current policy. Keith Brigden, technical underwriters, Axa said “We currently provide 15 days Road Traffic Act cover, however, in light of the Greenaway Report this is under review and will be changing”.

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