To ask the Secretary of State for Work and Pensions, with reference to the letter from the Minister for Welfare Reform to the hon. Member for Na h-Eileanan an Iar dated 3 November 2014 regarding the payment of funds to people with mesothelioma, by what process he decided what costs to insurers of compensating those people were fair and appropriate.
The Mesothelioma Act 2014 currently allows a levy to be applied to the insurance industry to fund a payment scheme for those affected by the failure of the employers’ liability insurance market to maintain adequate records.
Given that the insurers who are paying the levy to fund the Diffuse Mesothelioma Payment Scheme are not necessarily the same ones who took the premiums that paid for the historical insurance policies, the costs to them must be fair and proportionate.
Each year the levy will be estimated at a level which the Department believes is sufficient to cover the actual costs of running the Scheme. That is, the cost of its administration and the cost of the capital payments that are made to diffuse mesothelioma sufferers or their dependants. In any one year the levy will not exceed 3% of employers’ liability gross written premium as this is the point at which the insurance industry said that it would have to pass on the costs of the levy via increased premiums.
Further information on the costs of the Scheme and information about the levy and how it was calculated will be included in the first annual report on the Scheme which will be published on or before 30th November 2015.