Government announces Ogden rate reform
The UK’s Ministry of Justice is introducing the Civil Liability Bill to reduce the number of whiplash claims and change the Ogden personal injury discount rate.
The Ogden discount rate on compensation payments for long term injury will be set on the basis of rates of return on a low-risk diversified portfolio of investments.
Until now it has been based on returns on very low risk investments, a calculation that caused it to be cut from 2.5% to minus 0.75% last year. That change caused insurers to make huge provisions against future payouts.
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