Change to the Personal Injury Discount Rate (PIDR): September 2017 Update
This Adviser explains the Government’s response to the consultation and the implications for insureds.
Our earlier Adviser profiled the start of consultation on the personal injury discount rate (PIDR) - a calculation used to determine lump sum compensation to claimants who have suffered life-changing injuries. The government has now announced its response to the consultation.
Key points to note
- The proposed revisions should mean a reduction in the settlement cost of large personal injury claims (i.e. from what the cost would have been under the new rate imposed in March, albeit it will still be more expensive than prior to March).
- The change will take some time to come into force, as it requires new legislation.
- When the new legislation is enacted it is important that insureds and their brokers ensure reserves on affected claims are reduced to reflect the incoming PIDR rate, and any premium increases imposed as a direct result of the previous change are reviewed.