Got it covered?

How much do you know about the Continuous Insurance Enforcement (CIE) regulations? Graeme Trudgill, head of corporate affairs at the British Insurance Brokers’ Association, gives further details

Life for the estimated millions of uninsured drivers in the UK has become tougher since Continuous Insurance Enforcement (CIE) regulations came into affect in 2011.

The CIE regulations makes it an offence for keeping a vehicle without insurance. An additional enforcement scheme was introduced from 20 June 2011 to make sure that all vehicles are insured or a Statutory Off Road Notification (SORN) is made.

CIE differs from police on-road enforcement of uninsured driving introduced in 2005 in that, unless a Statutory Off Road Notification (SORN) declaration has been made by the vehicle keeper, they are required to insure the vehicle at all times.
    
All registered vehicle keepers must ensure that their vehicle has statutory minimum third party motor insurance. Failure to comply could result in a series of escalating penalties. All motor insurance records are registered on the Motor Insurance Database (MID), if records are not correct the keepers of legitimately insured vehicles could be at risk of receiving notification that they appear to be uninsured.
    
This is a fundamental improvement to the previous practice (before an uninsured driver needed to be ‘caught’ on the road to face enforcement measures) therefore BIBA is keen to raise awareness of how these changes in law affect motorists.

How does CIE work?
CIE systematically compares records between two databases, the MID with those held on the DVLA Registered Vehicle Database to identify keepers of potentially uninsured vehicles.
    
This will clearly identify any vehicle keepers who do not have a valid insurance policy on the MID.  
    
If it appears that a vehicle has no insurance or no SORN, than an Insurance Advisory Letter (IAL) is sent to the registered keeper. If the registered keeper takes no action, the keeper faces a fixed penalty fine of £100, possibly having the vehicle clamped, seized and destroyed, and the possibility of a court prosecution with a possible fine of up to £1,000.
    
As of June 2011, the Motor Insurers’ Bureau (MIB) issues and covers the cost of the new IALs to registered keepers informing them that their vehicle appears to be uninsured. The letter advises the keeper what they need to do to comply with the law and results in hundreds of thousands of letters being sent to vehicle keepers, some of whom may be insured but have not had correct details loaded onto the MID.
    
DVLA is responsible for the cost of enforcement, which takes the form of Fixed Penalty Notices (FPN) followed by the possibility of prosecution and/or wheel clamping should the vehicle’s keeper fail to heed the warnings. The cost of enforcement will be more than covered by fine income and is due to commence a short while after the first IALs are distributed.

What is the insurance industry telling customers?
Uninsured drivers cost the UK about £400 million annually. Drivers using their vehicle on the road without insurance are already committing an offence – so the need to get insured immediately.

Those drivers with insurance whose record does not appear on the MID should contact their insurance provider to get the MID updated immediately. This will mean that they avoid the inconvenience of being unnecessarily contacted by MIB and DVLA, or being stopped by the police.
    
Insurance records on the Motor Insurance Database can be checked for free at www.askmid.com.
    
A SORN declaration has to be submitted to DVLA if the vehicle is being kept off of the road. If the vehicle is taxed return the disc (including nil value discs) to DVLA using a V14 form.
    
There are some occasions when a vehicle can have no insurance. A vehicle can have no insurance if it has a valid SORN, or was exempted from SORN (as untaxed on or before 31/01/1998 and has had no tax or SORN activity since). It can also have no insurance if
it is recorded as ‘stolen and not recovered’ by the police, is between keepers, is scrapped, or is held in stock by an authorised motor dealer.
    
Uninsured driving enforcement has already had a major effect, with the number of uninsured drivers falling from 1.4m to 1.2 million since June 2011.

Company cars
One common question BIBA is asked is: if someone uses a company car and is therefore not the official owner, will their company get a letter if the car is not insured? If the company is listed as the vehicle’s registered keeper, they will receive a warning letter, followed by a penalty if there is no valid insurance policy.   
    
Drivers should make a point of checking the MID to see if the details of cover are recorded correctly when insuring the vehicle. Although most insurers process the information promptly on the MID, it is best to allow a week for this to update.
    
CIE is an important change to the motor insurance landscape. MIB is sending tens of thousands of IALs a month. CIE benefits  include safer roads, greater premium income for the insurance industry, a reduction in the number of claims made to MIB, a reduced levy to insurers and an increased IPT income to government.

Driving down costs
Another important development with motor insurance follows BIBA’s appearance before the Transport Select Committee into their Inquiry into the cost of motor insurance – which had increased by 40 per cent in the previous year – affecting vehicle owners of all types.
    
BIBA’s manifesto includes an eight point plan in order to drive down the cost of motor insurance. This includes the need for a framework for and greater supervision of claims management companies; insurance access to driver licence data to reduce application fraud; better arrangements to help people access suitable insurance, particularly young and convicted drivers; and a review of FSA guidelines on the selling of insurance products through price comparison websites.
    
BIBA also calls for a review of the pass plus system and develop the wider use of telematics, as well as a reform of the Northern Ireland legal system with regards to the handling of personal injury claims.
    
BIBA is committed to driving down the cost of motor insurance and will work to achieve access for the industry to driving licence information held by the DVLA in order to reduce fraud when applying for insurance. Currently around 20 per cent of endorsements are not correctly disclosed to the insurance provider and this can lead to problems in the event of claim time as insurers could refuse to pay out if the customer had not told them of a ‘material fact’. Motor insurance fraud accounts for £44 on every policy and so any initiative to reduce that is welcomed by BIBA.
    
BIBA also supports the call to investigate means of deploying and publicising new technology which can assess how cars are driven by young drivers and help reduce the cost of motor cover. There are already several new insurance broker ‘black box’ telematics products that have been recently launched and BIBA welcomes further discussion and wider debate on this technology.

Whiplash claims
BIBA welcomes the Ministry of Justice consultation on whiplash claims and gave three key recommendations. These were to introduce the panel of independent medical experts, to introduce a national call-off framework contract system, and a call for greater investigation into developing objective tests for soft tissue neck injuries.
    
BIBA has also delivered the new signposting agreement with Government that came in to force on 6 April 2012. This helps older drivers struggling to find insurance find a more suitable provider rather than just be rejected and it has seen a 200 per cent increase in enquiries since it launched.

Further information
www.biba.org.uk