A review has been launched into a controversial compensation scheme after it caused public outcry.
According to the Daily Mail, Justice Secretary Liz Truss announced the consultation after people were angered by a new formula for calculating personal injury claims that saw as much as £300 added to older drivers' insurance premiums.
Truss swung into action after it emerged that the changes increased costs for both motorists and the under-pressure NHS.
The Mail reported that the change made to the discount rate, used to calculate payouts for victims of serious accidents, was branded "crazy" and "reckless" by insurance companies, who said it would increase premiums.
The discount (or Ogden) rate reflects interest, and is designed to mitigate the effect of inflation on claimants' payouts. When the rate is lower, the payout is raised to prevent claimants running out of money.
Then government's recent cut in the discount rate means the amount paid in lump sums will increase, and according to Insurance Business magazine, Direct Line's profits could fall by £190 million as a result.
Though Truss accepted that the review will not lead to a change of policy in the short term, the Mail reported that she suggested the current system was not "fit for purpose".
The Daily Mail quoted Truss as saying: "I want to make sure that the way in which the discount rate is set remains fit for purpose. Awards of damages for life-changing personal injuries are necessarily going to be very large in some cases.
"But in the interests of society as a whole and the services that underpin it, I want to be sure that the system of compensation is one that compensates claimants properly, but is fair to consumers, business and taxpayers."