During June 2013, the Financial Conduct Authority published a review of Motor Legal Expenses Insurance (MLEI). The review gave industry-wide recommendations around how insurers sell MLEI, the cover it offers and the clarity of Policy wordings.

 So, here’s what you need to know:

  • The FCA noted a considerable gap between what MLEI covers and what customers expect it to cover. There’s widespread consumer confusion as to what the product actually provides.
  • The FCA highlighted that even where MLEI is included in the core policy as standard, we must still provide a clear explanation of what the product covers and what it does not. 

Here are the key facts to relay to the customer when selling MLEI:

  1. MLEI offers Legal cover if the customer is in an accident which is not their fault. Legal cover for accidents that are the fault of the customer is already included as standard in our motor policies.
  2. If the customer is in an accident that is not their fault they may wish to pursue a compensation claim against the driver who caused the motor accident (that is, the ‘at fault’ driver).  For example, the customer may wish to receive compensation for an injury sustained during the accident.
  3. If we are satisfied that the customer is more likely than not (that is, a 51% or more likelihood) to receive financial compensation, our MLEI policy will cover all legal expenses arising from the claim or a series of connected claims up to fifty thousand pounds (£50,000.00). 

RSA Policy Changes

In addition to the advice provided here, RSA will be rolling out a revised version of the MLEI Policy Wordings with effect from February 2014 across all our commercial motor products. It includes some definition and wording changes that make the policy easier for our customers to understand. There are also some changes in cover to bring us in line with FCA recommendations and recent Legal reforms. But the key benefits remain largely unchanged.

The sections amended are shown below:

Mini Fleet Policy Section 5 – Legal Assistance Plan
Business Car Policy        Section 7 – Legal Assistance Plan
Van Policy Section 8 – Legal Assistance Plan
Truck Policy Section 8 – Legal Assistance Plan
FleetShield Policy Section 9 – Uninsured Loss Recovery 

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