Following our article (Insurance-day.com, Jul 19) considering the impact of revisions to the present discount rate applied to lump sum injury awards, the Ministry of Justice has published its consultation paper, damages Act 1996: The discount rate - how should it be set? The consultation closes on October 23.
As discussed in this column, it is expected the Lord Chancellor will cut the discount rate from its existing level of 2.5%. A best estimate is either zero or 1%, with the consequence of increased awards to claimants. This would affect reserves, reinsurance recoveries and possibly premiums.
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