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To ask the Secretary of State for Business, Innovation and Skills
(1) what assessment he has made of the operation of approved repairer schemes and vertical agreements by motor insurance companies;
(2) what assessment he has made of the effects of the European Commission's supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles on (a) the operation of vertical agreements and (b) competition practices in the UK motor insurance market.
The European Commission's supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles form part of the legal framework for the application of competition law to the motor vehicles sector, which the European Commission adopted in 2010. The adoption of the new rules followed an assessment of competition in the motor vehicles sector by the European Commission.
As such, the Government considers that the operation of the new block exemption regime for motor vehicles and any monitoring of how that is working is a matter for the European Commission.
I would also note that the Office for Fair Trading (OFT) in September 2012 referred the UK's private motor insurance market to the Competition Commission (CC) for further investigation amid concerns that the market is not working well for motorists.
The OFT had previously conducted a market study in which it provisionally found that the insurers of drivers responsible for an accident (“at-fault” drivers) 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 organisations 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.
The CC has up to two years from the date of the reference 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. On