The Chancellor is to appoint a panel of three experts to assist with the discount rate review.
The panel is to consist of a financial management investment expert to advise on what services and advice is given to claimants, an actuary to consider rate issues and an academic specialising in the working of the financial services market and the economic cycle.
Although the panel was expected to be appointed by the end of September 2014, this has not yet taken place.
The discount rate has been set at 2.5% since 2001, however since then there have been significant changes in the financial markets leading to claimant representatives to call for the discount rate to be reduced. The Court of Appeal in Hong Kong reduced the discount rate, possibly pre-empting a reduction in the UK.
Due to the delays a decision is unlikely to be made prior to the general election, possible causing further delays in the new parliament. Insurers should welcome this delay as it provides some certainty for the short term at least.
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