LONDON--The Office of Fair Trading, or OFT, said Friday that it
referred the U.K.'s private motor insurance market to the
Competition Commission, or CC, for further investigation amid
concerns that the market is not working well for motorists.
MAIN FACTS:
-The OFT provisionally decided to refer the market to the CC in
May after a market study gave it grounds for suspecting that there
are features of the market that prevent, restrict or distort
competition.
-OFT study provisionally found that the insurers of drivers
responsible for an accident appear to have little control over the
way repairs and replacement vehicles are provided to the
'not-at-fault' driver.
-This may enable the insurers of not-at-fault drivers, and
others such as insurance brokers, credit hire organizations and
repairers, to engage in practices which appear to result in the
cost of replacement vehicles and vehicle repairs provided to
not-at-fault drivers being higher than they might otherwise be.
-Having considered the responses submitted during a public
consultation process, the OFT continues to hold the view that a
market investigation reference to the Competition Commission is
warranted.
-CC has up to two years to report its findings; if it finds that
features of a market are harming competition, it has powers to
impose remedies to address the situation.
-Write to Rory Gallivan at rory.gallivan@dowjones.com; Twitter:
@RoryGallivan
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