Government Sanctions Cut Diffuse Mesothelioma Payment Scheme Levy 2015/16

Dave Joyce, CWU’s National Health, Safety & Environment Officer has issued a letter to branches in which he details the immorality of the insurance industry and specifically of this Tory government in attacking the weakest in our society.

Now their latest victims are those who have worked with asbestos or have been exposed to it:

The government has announced this week that the 'Diffuse Mesothelioma Payment Scheme Levy on Insurance Companies for 2015/16' will be reduced to £23.2m from the £32m paid into the fund in 2014/2015 by insurers and the shortfall will be supplemented by the £8 million underspent from last year.

The Diffuse Mesothelioma Payment Scheme (Levy) Regulations 2014 require active insurers to pay an annual levy based on their relative market share for the purpose of meeting the costs of the Diffuse Mesothelioma Payment Scheme (DMPS). This is in line with the commitment by the insurance industry to fund a scheme of last resort for sufferers of Diffuse Mesothelioma who have been unable to trace their employer or their employer’s insurer.

The Diffuse Mesothelioma Payments Scheme (DMPS) was established in 2014 to compensate people diagnosed with mesothelioma after 25 July 2012 who could prove they were negligently exposed to asbestos at work but whose employer is no longer trading and their insurer cannot be traced.

The DMPS is funded through a levy paid by insurance companies active in the Employer Liability insurer market. It was the failure of insurance companies to maintain adequate records that led to many asbestos victims dying uncompensated.

Insurers gained financially from the premiums they received on policies sold, and benefited further through not having to pay out due to their own negligent record-keeping.

The Association of British Insurers (ABI) told the government that insurers could afford to pay 3% of Gross Working Premium (money collected from EL insurance premiums) without passing the costs on to customers. Subsequently, Mike Penning, former Minister for Disabled People under the last Tory-led coalition government stated in Parliament that 3% would be the figure set during the passage of the Mesothelioma Act 2014 and that applicants would only receive 80% of the going compensation rate under civil compensation levels.

The government had a golden opportunity to maintain the levy at last year's rate and implement improved payments under the scheme from 80% of average civil compensation to Mesothelioma victims diagnosed before 10 February 2015, to 100%.

The levy on insurers represents about 1.7% of the premiums they raise from Employer Liability insurance policies they sell, down from the 2.2% they paid last year. If the levy had been set at the 3% figure promised by the government in 2014 all applicants could have been paid compensation in full (100%) from the start of the scheme. There would also be enough money left over to compensate victims of other asbestos diseases unable to trace a former employer or their insurer (Asbestosis, Asbestos related Lung Cancer and pleural thickening).

Asbestos is the UK’s biggest workplace killer.

Around 5,000 people die each year from Mesothelioma and asbestos related lung cancer – 13 people for every day of the year. It is time the government stopped prioritising the financial interests of insurers over and above justice for asbestos victims. The government should maintain the levy at last year’s level and set the levy at the rate the insurers originally said they can afford, which Parliament accepted.

They can then compensate fully those applicants who only received 80% compensation, raising it to 100% and also make arrangements to compensate victims of other asbestos diseases also so that all asbestos victims whose lives have been ruined by their employer’s negligence and government failure to ban asbestos until decades after the dangers were known can receive payments.  

Mesothelioma, and other asbestos related diseases (lung cancer, asbestosis and pleural thickening) have a long latency period. These diseases typically appear 25-50 years after asbestos exposure, making it difficult for victims to secure compensation when their employer has gone out of business and no insurer can be traced.

The CWU Health, Safety & Environment Department has supported Asbestos victims and Asbestos campaigning organisations by writing a letter of protest to the government.

Source: CWU

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