CMA Guide

Information for brokers

Why was the Order introduced?

On 28 September 2012 the Office of Fair Trading (OFT) referred the supply or acquisition of Private Motor Insurance (PMI) and related goods and services in the UK to the Competition Commission (now known as the CMA) for investigation and report.

The CMA concluded that legal remedies were required to improve information on No Claims Bonus (NCB) Protection, as this was an area where the lack of consumer information was most acute.

As a result, the Order was passed in March 2015 and is to be implemented for New Business from the 1st August 2016 and Renewals from the 1st September 2016.

Where can I find the CMA Order?

The CMA Order (PDF) can be found here

What information must be provided under the order by a broker?

When "offering" NCB Protection the following requirements apply :

1. The consumer must be advised of:

    • the "implied" price of the protection i.e. the difference in premium if they take NCB Protection compared to not doing so
    • the average percentage discount scale awarded to consumers in the calendar year that concluded more than one month prior to the NCB Protection Offer
    • the effect that claims will have on the policyholder's NCB, with and without NCB Protection

2. Warnings must be displayed to consumers that NCB Protection does not protect the overall price of the policy, and that premiums may still increase following an accident, even if NCB Protection has been purchased.

Your company website

If you have a company website the NCB Protection statement must be displayed:

NCB protection statement

NCB protection does not protect the overall price of your insurance policy. The price of your insurance policy may increase following an accident even if you were not at fault.

NCB protection allows you to make one or more claims before your number of no claims bonus years falls.

Annual declaration

A declaration is required from all providers (both insurers and brokers) on an annual basis to the CMA confirming compliance with the Order and providing details of the average NCB tables that are to be used. This needs to be returned with your Annual Compliance Statement on the 1st February 2017.

The average NCB table will be displayed on your software system. The current Covéa Insurance tables are as follows:

Private Car

Number of years NCB
Average NCB Discount in 2016
1 year
22%
2 years
28%
3 years
34%
4 years
39%
5 years
42%
6 years
45%
7 years
48%
8 years
51%
9 years or more
54%

Commercial Vehicle

Number of years NCB
Average NCB Discount in 2016
1 year
34%
2 years
36%
3 years
38%
4 years
42%
5 years
45%
6 years
47%
7 years
48%
8 years
50%
9 years or more
53%