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Column 77O'Hara, Edward
Steel, Rt Hon Sir David
Taylor, Mrs Ann (Dewsbury)
Taylor, Matthew (Truro)
Tellers for the Noes :
Mr. Terry Lewis and
Mr. Dennis Skinner.
Question accordingly agreed to.
Mr. Deputy Speaker-- forthwith declared the main Question, as amended, to be agreed to.
That this House congratulates the Government for its initiative in setting up the Select Committee on Sittings of the House (the Jopling Committee) ; supports the objectives of making agreed improvements in the House's hours of sittings and working methods ; and welcomes the Prime Minister's recent statement reaffirming the Government's commitment to progress on parliamentary reform.
That the Speaker have leave of absence on Friday 24th June to attend in her constituency upon Her Majesty.--[ Mr. Patnick. ]
As amended (in the Standing Committee), considered.
& c. for mixed partnerships and bodies corporate --
The amendment reflects the fears of the Patent Solicitors Association that confusion will be caused by the use of the term "attorney". I understand that clause 86 originated from the hon. Member for Meriden (Mr. Mills) and was moved in good faith. Let me say at the outset that I share the hon. Gentleman's laudable aim of finding for professionals who deal with trade marks a term that does not have negative connotations in the United States, France, Germany or elsewhere. Likewise, I share his aim of ensuring that litigation on trade mark matters is made cheaper and easier.
I would certainly welcome stronger support among Conservative Members for the key role played by the Patent Office and for Labour's fight to protect the excellent record of its workers. My hon. Friend the Member for Newport, West (Mr. Flynn), who is in his place, has supported those workers.
The Patent Solicitors Association, which strongly supports the Bill, is highly critical of the introduction of clause 86 at a very late stage and at short notice. The association contends that the use of the term "trade mark attorney" will cause misunderstandings and even deception ; that the word "attorney" implies to businesses and the public that the practitioner is a qualified lawyer, when that is not the case ; that attorneys will be subject to discipline from professional bodies and ultimately the Supreme Court, when they will not ; that they carry indemnity insurance, which they do not ; and that they are trained in all aspects of the law and litigation practice, when they are not so trained.
According to the Patent Solicitors Association, the term "trade mark attorney" is not recognised in Europe. In the United States, an attorney is someone who is a qualified lawyer, and who has passed the exams of the state bar--a very different type of professional. Assurances have been given that trade mark agents are highly qualified by examination, but that is not the case. The register of members of the Institute of Trade Mark Agents reveals that only 38 per cent. of the members and fellows have passed the institute's exams. That means that of the 416 full members only 158 were so qualified while 258 were not. If those members, who form a majority in the institute, were to be known as attorneys, the public would be likely to believe them to be legally qualified when they were not and would consider them to be lawyers when they were not.
I do not seek to impugn the excellent work of the Institute of Trade Mark Agents, but I would welcome the Minister's thoughts on the reservations that I have
Column 79expressed, especially as other controversial clauses on unfair competition and lookalike products have been withdrawn.
The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : I have listened with interest to the points that the hon. Member for Edinburgh, South (Mr. Griffiths) has made. His amendment would delete clause 86, but I am not convinced that we should follow that course. I do not recall any dissent in Committee from the amendment tabled by my hon. Friend the Member for Meriden (Mr. Mills), which would allow registered trade mark agents to use the title "trade mark attorney". It is important to remember that the full title, not simply "attorney", would be used.
Moreover, as hon. Members will recall from the Committee, I reported that the overwhelming view of the departmental standing advisory committee on industrial property following consultation on the matter was in support of such a move. Although registered trade mark agents may not have a general legal qualification or be qualified as solicitors, they are qualified in trade mark legal practice by examination or experience. Their names also appear on the register maintained by the Institute of Trade Mark Agents-- the professional body which exercises control over them. As I said in Committee, what is at issue is the use of the title "trade mark attorney", not the use of the word "attorney" on its own. Therefore, there should not be any confusion in the minds of the public. One of the hon. Members who took part in the debates in Committee was the hon. Member for Newport, West (Mr. Flynn). I go some way towards agreeing with the hon. Member for Edinburgh, South that the hon. Member for Newport, West follows such subjects closely and also follows closely what goes on in the Patent Office. He gave a broad welcome to the change that has been made. Indeed, it received a broad welcome from the Committee. I understand the reservations expressed by the hon. Member for Edinburgh, South and his wish to raise the point, but I hope that he will not find it necessary to press the amendment to a vote.
Mr. Nigel Griffiths : The Minister has clarified one or two points. Although I still have some reservations, I have no wish to delay the progress of the Bill. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.
Order for Third Reading read .--[ Queen's Consent, on behalf of the Crown, signified ]
Motion made, and Question proposed, That the Bill be now read the Third time.--[ Mr. McLoughlin .]
Mr. Nigel Griffiths : I have the unusual privilege of welcoming the Bill on behalf of all sections of the House. Indeed, industry has been crying out for years for the protection that we hope that the measure will afford. Trade marks are often one of the best assets of successful businesses. They reflect the investment in quality and service of the work force, the management and the design teams. The confidence that a trade mark can inspire will ensure that the public can shop with an assurance of quality and design. The sad fact is that there have been delays in bringing this legislation before the House--delays which
Column 80have cost businesses revenue, hindered investment, cost jobs and are entirely the responsibility of the President of the Board of Trade and his Ministers.
In 1990, the Government published a White Paper, "Reform of Trade Mark Law", which responded to businesses' needs to register their trade marks for use in the United Kingdom and the rest of the world. It promised simplified procedures for registering trade marks and detailed improvements to detect businesses that held current trade marks.
Business reaction to the White Paper could not have been more favourable. Firms and individuals would save time and money in registering their trade marks. They would also have to spend less on bringing to justice those who infringe copyright, and loopholes in the law would be plugged, making it easier to secure a prosecution. In summary, this is a measure which business wants and that will give better protection to business and the public. There is no rational explanation for the lengthy delay in enacting it. Ministers have failed to explain to the House, both on the Floor and in Committee, why it has taken more than three years for the Government to introduce legislation on such a widely supported measure. There is only one word to describe the Government inaction and that is dither. Ministers have dithered for three years. The cost of their dithering has been borne by businesses and the public and it has been high. Present legislation, with its complexities and loopholes, is costing businesses around £30 million every year. By the time that the Bill becomes an Act, British businesses will have lost more than £100 million since the publication of the White Paper. It is a lame excuse for Ministers to say that there has been no time to legislate. I have studied more than 50 measures for which the Government found time to introduce primary legislation, and few merit the same priority as this.
Business has been very patient with the Government. The Bill contains items that were recommended by Sir Reginald Mathys's committee many years ago. We are now on the brink of putting in place safeguards for the 1990s for British businesses and entrepreneurs. Now the Government have decided to tamper with the civil service, which administers patents. Instead of reflecting on the damage done to so many public services by the attack on civil servants, Ministers want to treat them like some fast food franchise.
My hon. Friend the Member for Newport, West (Mr. Flynn), whom the Minister commended for his activities in highlighting the good work done by the Patent Office, warned the House on Second Reading and in Committee that if its work were tampered with further, the primary losers would be not be civil servants but the public and businesses that generate the wealth of the country. The uncertainty over the future status of the Patent Office has meant that when the European Commission considered where to locate its new office, it did not choose Britain, with a track record of a Patent Office that goes back 119 years, but preferred Alicante in Spain--an airport favoured by certain people who have made a lot of money out of trade mark goods, illegally.
Instead of listening to the concerns of enforcement officers in trading standards departments, Ministers are determined that those key consumer protection services should be split up. It is time for Ministers to listen to trading standards officers and their fears that unscrupulous traders, who infringe trade mark legislation, will still find
Column 81legal loopholes. Trading standards officers do not believe that the Bill goes far enough in plugging such loopholes, or that it ensures that seized counterfeit goods can be more easily returned for destruction, by bringing the law into line with section 100 of the Copyright, Design and Patents Act 1988.
My main regrets are that it has taken more than three years for the Government to introduce this uncontroversial Bill, that their delays have cost businesses more than £100 million and that the Bill still has some flaws. In order to give our inventors, businesses and the public some of the protections that they need, however, I commend it to the House, warts and all.
Mr. McLoughlin : I am grateful to the hon. Member for Edinburgh, South (Mr. Griffiths) for welcoming the Bill. He made some of the usual taunts that we heard from him on Second Reading. He could not quite bring himself to give the Bill a general welcome and if he re-reads his speech in Hansard he will see that, if that is the voice of the new European Labour party, some of his comments about Spain will have to be tempered. Perhaps he is on the side of the section of the party of the right hon. Member for Derby, South (Mrs. Beckett) rather than that of the hon. Member for Sedgefield (Mr. Blair). However, I am grateful for his welcome for the Bill. This is a complex Bill, but it is important to industry. I am grateful, therefore, for all the co-operation that has been demonstrated on both sides of the House in speeding its passage through the House. The Bill is a clear example of the Government's commitment to help industry and commerce. A company's trade mark can be among its most valuable assets and a major marketing tool in competing for business at home and overseas.
The Bill deregulates the administrative procedures surrounding the maintenance of registration and that will directly reduce costs for industry and commerce. The Bill will make it easier for a trade mark to qualify for registration and will give registered trade marks wider infringement rights. It will also enable the United Kingdom to ratify the Madrid protocol. All those changes will make it simpler and cheaper for industry and commerce to protect their trade marks, both in the United Kingdom and overseas.
In Committee, we made some changes to the Bill that will help further in that direction. A person who wishes to appeal against a decision of the registrar may, as an alternative to going to court, appeal to a person appointed by the Lord Chancellor, before whom he may be represented by a trade mark agent--or attorney, now--or a solicitor.
Another provision of the Bill that was amended in Committee was that dealing with counterfeit goods. Hon. Members will be aware that the Bill strengthens the protection against trade mark counterfeiting, but attention was drawn to a gap in its provisions as they related to the delivering up of counterfeit goods. We have closed that gap. It will now be possible for trading standards officers to seek forfeiture of goods seized whenever they can demonstrate to a court that the goods are counterfeit. That will enable them to dispose of goods that are clearly counterfeit. That is a positive and helpful change, which can only help trading standards officers in their determined efforts to combat trade mark counterfeiting. That was not
Column 82part of the original consultation documents and would not have been in the Bill, but it has been included as a result of some court cases that we all know about.
During the passage of the Bill, much attention has been paid to the subject of lookalike products, which are allegedly got up or designed to look like those of brand leaders. Reference was made to that, both in this House and in another place. It was clear that businesses are divided on the question. Many feel that the present law provides insufficient protection against competitors taking advantage of the reputation of established products. Others, however, contend that the law is adequate and that special measures against so-called lookalikes would restrict legitimate competition and reduce consumer choice.
Even if one accepts the need for measures directed against lookalikes, it would not have been possible to deal with them in this Bill, which is about trade marks. A lookalike product may, in an extreme case, copy most of the features of a brand leader, but the one thing that it does not copy is the trade mark. As I said in response to a written answer to a question from my hon. Friend the Member for Medway (Dame P. Fenner), the Bill broadens the definition of what may be registered as a trade mark, so that distinctive attributes of goods, such as their packaging or shape, may be considered for registration as trade marks. The owners of such trade marks then have the right to take action for infringements against anyone using the same or similar marks on the same or similar goods. The Bill should, therefore, be given a chance to work. If, once it has been in force for a reasonable period, it can be demonstrated that there continues to be a problem, the Government will be prepared to look again at the situation.
Mr. Jim Cousins (Newcastle upon Tyne, Central) : If, after the period to which the Minister has just referred, the Government were minded to take action on the matter, in what context and form would they attempt to deal with it legislatively ?
Mr. McLoughlin : I said that we will look at the matter after some time, but I cannot at the moment anticipate what will come out as a result of any inquiry that we decide is necessary. The hon. Gentleman cannot get any more than that at the moment because I believe that the Bill goes some way to meeting some of those concerns. I should just like to cover a few others points and the hon. Member may come back later if he wishes.
We certainly understand the points made by the major brand owners. While we are firmly in favour of robust competition, some of the examples of lookalike products do seem to be close to the boundary between what is fair in business and what is not. I would therefore like to warn the producers of those goods. If they continue to sail close to the wind, there will undoubtedly be pressure on the Government and, as I have said, we would look at the matter again. I know that all hon. Members wish to see the Bill pass on to the statute book and come into force as soon as possible. In particular, there is pressure to bring into force those provisions of the Bill that deal with counterfeiting, so that they are available to trading standards officers to deal with the peak period for the sale of counterfeit goods in the run-up to Christmas. We are sympathetic to that call, and the Government will consider a timetable for implementation to determine by how much the planned date of 1 December 1994 can be brought forward.
Mr. Nigel Griffiths : I welcome that, because the Minister has gone half way. Does he recognise that there are two peak periods for counterfeiters ? There is a peak sales period in August, which he has not mentioned, and one in December. Will the Government tackle the problems in August, which have been identified by the CBI and the anti-counterfeiting group ?
Mr. McLoughlin : I know that this point does concern the hon. Gentleman. Amendments have been made and the Bill will not have completed its stages once we are finished here tonight. That will depend upon progress in another place. I am keen to see the provisions relating to that type of counterfeiting brought into action as quickly as possible.
I am grateful for the constructive and speedy way in which the Bill has been considered by the House. That speed has recognised the Bill's importance to industry and commerce, and to companies and small traders alike. A modern trade mark system is long overdue. This was a manifesto commitment two years ago and I am glad to be able to help discharge it. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time, and passed, with amendments.
That the draft Insurance Companies (Third Insurance Directives) Regulations 1994, which were laid before this House on 24th May, be approved.
As with the previous measure, I am bringing before the House another useful piece of legislation. This, I am often told, is not characteristic of the Government's policies generally, in which case we may be breaking the mould today.
The directives that the regulations implement will be of significant benefit to the people of this country. We in the United Kingdom are fortunate, in that the system of prudential supervision in insurance which is established by the directives reflects our own system of supervision, based on freedom with disclosure. The directives in effect export our regulatory system to other member states, many of which have operated more restrictive systems than we do. One of the most important benefits of the directives--the easing of such restrictions in other member states, and hence the opening of their markets to us--does not therefore appear in the draft regulations that are before the House for approval tonight. Having said that, I should explain that the directives do not harmonise the rules operated by supervisory authorities throughout the European Community, apart from a basic minimum. They rely instead on mutual recognition, which is much the best way of performing these functions. As such, they are consistent with the principle of subsidiarity.
The regulations are to be made under powers in the European Communities Act 1972 and mainly amend the Insurance Companies Act 1982. Consequential amendments are made to the Financial Services Act 1986. They relate to the prudential supervision of life and non-life insurance--although in the case of Lloyd's some similar changes will be required to the byelaws.
If I were to attempt to give the House a detailed and blow-by-blow account of the purpose of each regulation, we should probably be here all night. Instead, I have provided the House with notes on the regulations, copies of which are available from the Library. I hope that hon. Members have found those useful. That leaves me free to highlight the more important provisions of the directives, and the implementing regulations, and to offer comment on what I see as the benefits that the directives bring to insurers and consumers throughout the Community.
The third insurance directives established the so-called "single passport" principle for insurance companies. That principle has already been adopted for banks and building societies. It will mean that any insurance company with its head office in a member state of the European Community may carry on direct insurance business through a branch in another member state, or provide direct insurance from one member state into another, on the basis of the authorisation that it receives from the supervisory authority in the state in which its head office is situated. For these purposes, that is called the home state. The immediate benefit of those arrangements for United Kingdom insurers is that, instead of having to comply with the often quite onerous supervisory requirements of each member state where they have a branch, they will only need to submit one return to the Secretary of State in respect of all their business.
Column 85Similarly, United Kingdom branches of companies with head offices in other member states will no longer have to submit returns to the Secretary of State. Another benefit is that companies will no longer have to submit their proposed premium rates and policy conditions for prior approval by the supervisory authorities in the member states where they intend to market their insurance products.
The single passport will not extend to companies whose business is restricted to reinsurance business, to certain small mutual companies that are below a specified threshold or to companies whose head office is outside the European Community.
For companies whose head offices are in the European Free Trade Association states of Austria, Iceland, Norway and Sweden, and for life insurance companies whose head office is in Finland, the authority of the single passport will be valid throughout the 17 states in the European Economic Area once those states and the European Community have ratified the extension of the EEA agreement. This will require a further set of regulations in due course. Companies that do not get the single passport will still be able to benefit from other changes in the regulations that I have made recently--notably, the ability to take into account the value of rights under new financial instruments such as derivatives and stock- lending transactions in valuing the assets that they must hold to cover their insurance liabilities.
The single passport procedures are set out in schedules 6 and 7 to the third directives regulations. Even in a single market, it is important for supervisory authorities to know which companies are carrying on business in their countries and for the companies themselves to know what laws will apply to them. The regulations therefore require that an EC company wishing to use its passport in the United Kingdom must be recognised. This means that the company's home state authorities must notify the Secretary of State of its intention to carry on direct insurance business through a branch in the United Kingdom, or to provide direct insurance into the United Kingdom, and supply the Secretary of State with certain prescribed information about its proposed business, its authorisation and its solvency. Similarly, a United Kingdom company must supply to the Secretary of State information about its proposed activities, which the Secretary of State will forward to the relevant authorities in the target member state.
A consequential amendment to the Financial Services Act will ensure that an EC company will be automatically treated as authorised under that Act in the same way as United Kingdom authorised insurers already are.
A fundamental requirement in the directives is that
"member States shall take all steps necessary to ensure that the competent authorities have the powers and means necessary for the supervision of the business of insurance undertakings with head offices within their territories . . . and for the purpose of seeing that they are implemented".
They must also take into account
"the need to ensure the sound and prudent management of an insurance undertaking".
Mr. Nick Hawkins (Blackpool, South) : Does my hon. Friend agree that it will be absolutely essential for the high standard and prudent supervision of insurance companies that Ministers in other member states can reassure British Ministers of the high standards of supervisory regulation
Column 86and compliance ? Otherwise there will be a danger of lower standards in those countries coming into this country by the back door.
Mr. Hamilton : I understand the fears of my hon. Friend the Member for Blackpool, South (Mr. Hawkins), although they may be misplaced. The Commission will certainly take its policing role very seriously, as will the Government. I am perfectly satisfied that no dangers will arise as a result of our exporting our system of supervision into other parts of the European Community ; in fact, that offers great opportunities for our insurance businesses to break into markets which, if not entirely closed to them, have at least placed many obstacles in their path. On the whole, this liberalising measure will be of great benefit not only to European consumers of insurance services but to British business consumers because of the extra competition which it brings. I do not underestimate the fears that my hon. Friend the Member for Blackpool, South has expressed. We will certainly be vigilant to ensure that the interests of the public are fully protected in the opening up of new markets that I have described.
Sir Teddy Taylor (Southend, East) : Can my hon. Friend say clearly and objectively that the directives will ensure free trade for British- based insurance firms seeking to do business in life and non-life insurance ? On the two previous occasions on which we have had directives that apparently secured free trade, we found, on inquiry, that all kinds of restrictions operated--between mass risks and large risks and also on the initiator of inquiries on life business. Will British-based companies really now have total freedom to seek life and non-life business on the continent--subject, of course, to the derogations obtained by Germany and Denmark ?
Mr. Hamilton : My understanding is that the directives will open up the European market in the way that I have described. As the internal market Minister and deregulation Minister in our Government, I am very anxious to take advantage of those opportunities. I cannot guarantee that there may not be attempts to inhibit the working of the market. However, I can assure my hon. Friend--with whom I share many prejudices in this respect--that I will be particularly keen to ensure that the opportunities that I have mentioned are not in any way minimised. If any obstacles are placed before our companies to prevent them from developing in the way that I hope, the British Government will be foremost in seeking to use a crowbar to prise open those markets that may be partially closed to us.
The directives require member states to ensure that insurance companies are soundly and prudently managed--the point which my hon. Friend the Member for Blackpool, South raised. I have listed criteria for sound and prudent management in schedule 1 to the draft regulations. Although the criteria are not, for the most part, new, by bringing them together, I have given them a better focus and proper weight. I have also introduced additional powers enabling the Secretary of State to investigate companies and obtain documents for the purpose of ensuring that the criteria are complied with. Failure to comply with any of the criteria will be a ground for intervention by the Secretary of State.
I have also introduced provisions that will enable the Secretary of State to assist a supervisory authority in another member state to exercise its functions in relation to
Column 87the United Kingdom branch of an insurance company under its supervision--for example, by facilitating or assisting in an on-the-spot investigation, or by preventing a company from disposing of or otherwise dealing in any assets that it maintains in the United Kingdom.
In addition, I have introduced changes to the powers of the Secretary of State in relation to the authorisation of insurance companies. One new and important provision that I should mention is the power to suspend a company's authorisation in urgent cases--regulation 11. Although the Secretary of State already has a power to withdraw a company's authorisation, the new power will permit a more flexible approach. Companies will be able to make representations against the suspension and if, in the event, the concerns of the Secretary of State that gave rise to the suspension are unfounded, the suspension will be lifted without the need for the company to reapply for authorisation. Thus, the new power should be in the interests of policyholders and companies alike.
We emphasised in the consultative document published last December, and I emphasise again now, that these are reserve powers which I do not expect the Secretary of State to have to use unless genuinely necessary. In the vast majority of cases, United Kingdom insurers are soundly and prudently managed and in practice the provisions should have no effect on them.
A further requirement of the directives is that a person must obtain the approval of the relevant supervisory authority each time he increases his shareholding or voting power in an insurance company above one of several specified thresholds. To implement that, I have introduced the concept of "shareholder controllers", defined in terms of the percentage of the shares or voting rights that a controller holds. A person becomes a shareholder controller if he acquires a holding of 10 per cent. or more of the shares in the company, or is able to exercise 10 per cent. or more of the voting power at a general meeting of the company. Subsequent notifiable thresholds are at 20 per cent., 33 per cent., 50 per cent. and at the point at which the person becomes a majority shareholder controller. Notification and the approval of the Secretary of State is required on each occasion on which control is increased above those thresholds. Notification of decreases below the thresholds is also required. Another important obligation in the directives, which is already placed on banking supervisory authorities, requires supervisory authorities not to divulge information that they have received in confidence in the course of exercising their functions without the consent of the originator ; however, information may be disclosed to certain authorities without prior consent if the disclosure would assist that authority to discharge specified functions. Those permitted disclosures are listed in schedule 2 to the draft regulations.
The provisions on transfers of insurance contracts from one company to another have been revised. Under the principle of home state control, responsibility for authorising a transfer between two companies with their head offices in the EC rests solely with the home state, but is subject to the consent of other member states that have an interest. The rules are, however, unchanged in other
Column 88cases. I have found it clearest to set out all the transfer rules in a new schedule to the Insurance Companies Act 1982--schedule 3 to the draft regulations.
The changes brought about by the directives have provided an opportunity to review the assets that a company may value as cover for its liabilities. In line with developments in other financial services sectors, the directives recognise the increasing use of derivative contracts such as options, futures and contracts for differences, and also stock-lending transactions.
In response to requests from the insurance industry, I have, to a limited extent, deregulated the current provisions to give insurers new freedom to count the value of rights under such contracts as admissible, subject to conditions. Those conditions should go a long way towards ensuring that the severe losses that we read about from time to time, which result from inappropriate use of derivatives, do not happen in the insurance sector.
I have taken account of comments made in response to the consultative document about the proposed new treatment of debts. The regulations that I have made recently have been framed to meet those concerns.
I have also introduced changes to the rules on determination of liabilities to reflect the provisions of the directives.
The directives introduce new rules relating to the make-up of an insurer's required margin of solvency. Companies may take into account cumulative preference share capital and subordinated loan capital, known as "hybrid capital", up to prescribed percentages of that margin. I have not made provision in the regulations for the new rules on subordinated loan capital, as, for the time being, I intend to consider the proposed use of these instruments by companies on a case-by-case basis.
The measures should assist insurance companies, especially mutuals, to raise new capital and to compete effectively with other financial services sectors, while ensuring that their assets and liabilities continue to be prudently valued.
In due course, I intend to consult on further possible deregulation, for example in relation to the form and content of the annual return that insurance companies are required to submit.
A new requirement of the directives is that prospective policyholders should receive certain information about the contract before they enter into it. In the case of life assurance, some information must also be provided to policyholders during the term of the contract. United Kingdom life companies are already used to providing some prescribed information in relation to life policies that are investment contracts and thus covered by rules made under the Financial Services Act. The new requirements of the third life directive are not materially different.
An additional requirement, however, is that some information must now be given during the term of the contract. Some concern has been expressed by insurers, particularly about the requirement for annual disclosure of bonuses. While this is current practice in most cases, some contracts will be newly affected. I have therefore taken insurers' concerns into account in implementing the requirement, so as to minimise the cost of compliance. Nevertheless, I believe that it is important for consumers properly to understand the important aspects of their insurance policies, especially before they commit themselves. The regulations balance that objective with what I recognise is a burden on business.