The release of a paper examining options to reform NSW’s compulsory third party (CTP) insurance scheme is being embraced by major industry players.
The Insurance Council of Australia (ICA) welcomes the New South Wales Government’s release of the discussion paper, saying CTP reform is a highly complex matter that requires extensive consultation between government, insurers and other stakeholders.
“Any changes to the scheme must support the needs of motorists and injured people, reduce costs and promote insurer competition to keep premiums down,” says ICA CEO Rob Whelan.
“The ICA and its members look forward to contributing to the discussion and findings ways to make the scheme fairer, more affordable and more sustainable for the years ahead.”
IAG Chief Executive of the Australian Consumer Division Anthony Justice also welcomes the discussion paper, saying it reinforces the need to put consumers’ interests first by giving motorists greater confidence in the claims process.
“On average, only 45 cents in the dollar of compensation that is paid under the scheme ends up in the hands of the injured person,” says Justice.
“This is clearly inequitable and we support changes to the scheme that will return more funds to those people seriously injured in an accident.”
Meanwhile, the ICA has also backed plans to review the NSW CTP insurance scheme for point-to-point transport services.
In its submission to the NSW Point-to-Point Transport Taskforce last year, the ICA advocated the creation of a separate class of CTP insurance for ride-hailing (ride-sharing) services.
A separate CTP class for ride-hail drivers in the ACT comes into force from 1 April.
Whelan says the ICA will study the six options outlined in the NSW discussion paper and make a submission after consultation with member companies.
“To keep the NSW CTP scheme sustainable and fair for all motorists, it’s imperative that premiums paid by private and commercial drivers reflect the risk they represent in causing accidents that result in people being injured,” Whelan says.
“At the moment, ride-share drivers are categorised in the same CTP class as motorists who only use their vehicles for private purposes.”
In contrast, other point-to-point services such as taxi drivers and hire car operators pay much higher CTP premiums than private motorists due to the higher claims risk they represent.
“On that basis, the ICA welcomes moves to level the playing field,” says Whelan.
Whelan adds that requiring motorists to register as ride-hail drivers would allow insurers to start collecting the data needed to measure the risk exposure they represented.