Financial strength

MPS financial strength and corporate governance

There are often long delays between an adverse incident occurring and the ultimate settlement of any subsequent claim – the average time-lag between an incident and the claim being reported to MPS is three years with further long delays before settlement. During this time the value of these claims inflates at a rate significantly in excess of retail price inflation.

It is, therefore, of paramount importance to MPS members and their patients that MPS’s financial position is strong enough to cope with the uncertainties caused by these delays. The cost of potential future claims needs to be provided for in addition to the costs arising from claims that have already been reported to MPS.

At the end of 2006, the total assets available to meet claims was slightly in excess of £925million and these assets are sufficient to meet both reported and unreported claims – a fully funded position. There are many factors which can affect future claim values and as a matter of prudence, MPS holds reserves to cover unforeseen eventualities.

Although MPS is not a listed company, it chooses to comply with the relevant sections of the New Combined Code of the Committee on Corporate Governance.

As a mutual organisation MPS exists solely for the benefit of members and is fully accountable to them. Directors’ remuneration is reported in our Annual Report and Accounts and is set by the Remuneration Committee of Council. Executive remuneration is also available to the Remuneration Committee. Any member of Council is entitled to know the benefits package of any employee of MPS.