What is the ECCT Bill and what relevance might it have for insurers tackling fraudulent claims? Keoghs met with Home Office officials last week to share some observations:
On 22 September 2022, the Economic Crime and Corporate Transparency Bill was laid before Parliament aimed at delivering a suite of wide-ranging reforms to tackle economic crime and improve transparency over corporate entities.
The Bill will give greater powers to the Registrar of Companies to act as gatekeeper for the integrity of the register by querying filing and requiring further information. The Bill also contains provisions requiring the verification of identities for company directors, introducing new rules intended to improve the financial information on the register, and reforms so as to give business more confidence to share information to tackle money laundering and other economic crime.
On 27 March 2023, the Bill had its first committee stage sitting in the House of Lords. The ECCT Bill is scheduled to have further committee stage days throughout April and May. The Bill is being brought forward by the Home Office; Keoghs partners Samantha Ramen and Gary Petterson met with officials last week to discuss further.
One major feature of the Bill is to create the power to issue fines, unlimited in value, to large companies who have failed to take reasonable steps to stop their employees from committing fraud against members of the public, where that fraud is, in part, for the benefit of the company. Whether a company is ‘large’ is defined under the Companies Act 2006. Those that meet two out of the three following criteria are caught by the provisions: over £36m turnover; a balance sheet of over £18m; more than 250 employees. Many insurers will meet this test and may want to revisit their internal checks once the guidance is released by the Home Office.
From a claims validation perspective, the reforms propose to give businesses more confidence to share information to tackle money laundering and other economic crime by disapplying civil liability for breaches of confidentiality for firms who share information to combat economic crime. It will be interesting to see how this goes further than the exemptions set out in schedule 2 of the Data Protection Act 2018.
The Registrar of Companies will have powers to share information with law enforcement, regulatory bodies and other public authorities and there are also provisions to prevent abuse of personal information on the Companies House Register with individuals able to apply to have various information supressed to avoid ID theft. Given the ever increasing industry collaboration involving the Insurance Fraud Enforcement Department, the Solicitors Regulatory Authority, the General Medical Council (GMC) and others, this is welcome news and should assist in increasing detection of fraudulent claims.
Keoghs will continue to engage with the Home Office and wider stakeholders on this issue. If you have any questions or would like to discuss this matter in more detail, feel free to contact either Samantha Ramen or Gary Petterson.
Samantha Ramen & Gary Petterson
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