Page 3691 - Week 12 - Thursday, 22 November 2007
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and injury rate than any other Australian state or territory. On the other hand, our premiums are higher than anywhere else except the Northern Territory. The Northern Territory, I have to remind members, is a place where until recently there was no speed limit on the open road. It is also a place where some less than satisfactory driving conditions exist.
Third-party insurance is a grudge purchase imposed by governments: insurance that you buy to protect yourself against claims from other people in case you negligently injure them. It is compulsory in every country with a developed economy and legal system. So, despite significant differences of detail in design of schemes, the need for a regulated scheme to provide compensation for people injured in motor vehicle accidents is almost universally accepted.
In Australia every jurisdiction has its own, unique CTP scheme that differs in detail from every other scheme. However, there are two main types of schemes: no-fault compensation schemes, such as in Victoria and Tasmania, and fault-based common law schemes. The existing ACT scheme is a fault-based scheme, meaning that it is necessary to prove that someone else has been negligent in order to receive compensation.
The ACT scheme is also privately underwritten, as is the case in Queensland and New South Wales. In the other states and the Northern Territory, CTP is provided by a statutory monopoly. However, whereas the motorist has the choice of six insurance brands in Queensland, and seven in New South Wales, there is just one insurer, NRMA Insurance, operating in the ACT. This is despite the legislation allowing for competition and there being, as I mentioned earlier, 16 insurers when the scheme commenced in February 1948.
When there is no competition, or prospect of competition, it is natural to be suspicious of the monopolist, even if the monopoly is accidental. CTP insurance premiums in the ACT are relatively high; therefore it is natural to assume that the insurer, with or without the connivance of government, is charging excessive premiums and making excessive profits at the motorist’s expense.
I would like to put on the record that NRMA Insurance has not abused the accidental monopoly which it has held since 1980. In fact, it is not the NRMA but the existing 60-year-old legislation that has inhibited competition and kept insurance costs high. In recent years, for instance, premiums for a private car have been nudging $400. And, of course, some classes of vehicle owners, including many operators of goods vehicles used for private purposes as well as for business, pay premiums in excess of $1,600 and naturally wonder why they should not register their vehicles illegally across the border. This will be addressed by regulations under the new legislation.
This bill does three fundamental things, and in so doing draws upon the most modern statutory provisions available:
• Chapter 2 of the bill, derived from equivalent New South Wales and Queensland provisions, establishes a new basic structure for the CTP scheme, including provisions regulating CTP insurance premiums that are very familiar to the seven
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