On 25 July 2012 two papers were published which may affect the way in which EL insurers deal with mesothelioma victims who cannot trace their employers or EL insurers.

The first was a ministerial statement published by Lord Freud, the Minister for Welfare Reform, summarising the Government's response to a public consultation on the support which is provided to people who need to trace EL insurance. We have previously blogged on this paper here. Lord Freud's statement sets out the Government's intention to bring forward legislation to establish a scheme to make payments to those victims of mesothelioma who are unable to trace either the employer who negligently exposed them to asbestos, or their employer's EL insurer for the relevant period. It is proposed that the scheme would be funded by a levy on current EL insurers based on their gross written premium.

The proposed legislation would also make membership of the Employers' Liability Tracing Office (ELTO) (which maintains an electronic database of certain EL polices) mandatory for all active and run-off insurers. It is envisaged that ELTO will create a "Technical Committee" to determine disputes over evidence of cover, whose decisions will be binding on ELTO members.

The Government intends to bring the proposed legislation before Parliament when parliamentary time allows. It is of course difficult to know when this might be, but we will continue to monitor the situation and report any further developments on the blog.

The second was an FSA consultation paper, Tracing Employers' Liability Insurers - Historical Policies (http://www.fsa.gov.uk/static/pubs/cp/cp12-14.pdf) which deals with the obligations of EL insurers to make searches of their historical records when they receive requests to do so. The consultation paper proposes that all firms with actual or potential liability under EL policies should be required to take reasonable steps to conduct effective searches of their records for historical EL polices (or other documents, such as cover notes) when they receive a request to do so (a requirement which is already imposed on members of ELTO). It is proposed that the new obligations will take effect by means of amendments to ICOB 8.4.

Responses to the consultation paper are due by 17 October 2012. The online response form can be accessed here.