Insurers have suggested that medical reporting organisations should be barred from registering more than one company on the new register for whiplash diagnosis.

The government has called for evidence on the performance of the online MedCo system after reports that MROs were registering multiple entities to ensure a greater market share.

There is also concern that some of those that have registered are not capable of producing the number of reports required of them.

The Association of British Insurers (ABI) today said direct medical experts have offered their services through what appears to be an MRO but is simply an IT platform, with little chance of national coverage.

It accused some market participants of deliberate attempts to ‘game’ the system through manipulation of the random allocation process.

The ABI said national organisations have registered ‘shell’ companies which significantly reduce the choice supposedly offered to law firms selecting an expert to carry out diagnosis.

The ABI called for a ‘distinct separation’ between MROs, including a prohibition on one MedCo-registered MRO being owned by, part of the same corporate structure as, or having the same named directors as another MRO.

‘It should be explicitly clear that multiple MRO registrations and “shell” companies undermine the government’s policy objectives in terms of randomisation and the “offer”,’ said the ABI.

‘This will allow MedCo greater powers to prevent such firms from entering the system in the first place. It should be easier for MedCo to remove any “shell” companies once an audit has been undertaken of firms once they have been registered.’

The ABI’s response calls for MROs required to process at least 40,000 independent medical reports a year to prove they have done so in the past or have a clear business plan how they will increase capacity. They should also, if referring to themselves as ‘national’, be prepared to carry out checks in at least 85% of postcodes to ensure claimants do not have far to travel.

The ABI said MedCo was not designed with a regulatory function, but in considering the behaviour of MROs it has evolved into the position of ‘pseudo-regulator’.

‘Now is the right time to ask whether a regulatory framework should be applied to MROs in light of the behaviours witnessed in the market since MedCo became operational.’