Embracing the inevitable

The UK's relative lack of enthusiasm for things European often leads us to be dismissive of the European Parliament and the other institutions of the European Union.

Such attitudes are out of date and damaging the UK, in particular, the insurance industry. We engage in debates about European legislation far too late and with too little understanding of what has prompted it in the first place. If you doubt the truth of this just ponder why the general insurance market is currently undergoing its biggest shake-up for a generation.

The statutory regulation of general insurance is happening because the EU wants it to happen. While the UK insurance market was arguing about the relative merits of its two voluntary initiatives, the General Insurance Standards Council and the Insurance Brokers' Registration Council, the EU was slowly passing the intermediation directive that swept this self-regulatory apparatus to one side.

The insurance market needs to take Europe much more seriously and stop leaving it to the Europeans. We could start with two proposals currently making their way through the institutions of the EU, both of which could have a dramatic effect on the insurance market.

The first is the proposal promoted by Anna Diamantopoulou, the Greek Commissioner, to end discrimination in the pricing of insurance premiums.

She wants to stop insurance companies setting premiums on the basis of gender, regardless of the actuarial facts. It is easy to dismiss such proposals but it is being taking seriously in Europe. Absurd, but where we are heading.

The second is the capping of motor insurance liability payouts. Much of Europe is terrified by the size of payments after the Selby rail crash and wants to cap the size of payouts to EUR5m. There is some merit in this as far as the industry is concerned, though too low a limit could hit accident victims.

Where is the debate on this issue in the UK? There is none. It is time we woke up to just how much is going on in Europe.