Page 28 - Week 01 - Tuesday, 12 February 2008
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To ensure that premiums are set at a level that recoups compensation paid under the present scheme and the other costs of the scheme, NRMA Insurance voluntarily subjects itself to very rigorous and intrusive regulation. This includes having its actuarial projections peer reviewed by an independent actuary appointed by the government before those premiums are approved and fixed by regulation. It is both cumbersome and inefficient. Competition, under the existing legislative platform, would not lead to cheaper premiums for motorists.
The report of the CTP steering committee was inherited by the Carnell government in 1995. The review was commissioned by then Chief Minister, Rosemary Follett, in 1994. The Carnell government subsequently went so far as to introduce an exposure draft of a CTP bill that tinkered with the scheme. Unfortunately, nothing eventuated from that exploration.
Given that the government has adopted the totality of regulatory provisions from the New South Wales scheme, some members have asked why the ACT does not simply adopt the whole New South Wales scheme now and be done with it. The government has adopted the regulatory provisions of the New South Wales scheme to provide insurers with the expectation of consistency in the way scheme regulation is administered and in response to the views of insurers in relation to that expectation of certainty. I should add also that the New South Wales regulatory scheme is not dissimilar from Queensland in principle.
However, the government chose to adopt the Queensland claims provisions in large measure as opposed to the New South Wales claims provisions. In 1999 the New South Wales government took action to correct a serious dislocation in the area of CTP claims. That state faced a unique confluence of circumstances not shared by Queensland or the ACT. As a consequence of those issues, New South Wales needed to apply a threshold test to potential claimants that disenfranchised any injured person who did not have at least a 10 per cent whole-of-body impairment. Damages were capped as well. Premiums were capable of being increased based on risk profiles.
The ACT did not incur such fundamental problems that would justify radical action of the type applied in New South Wales, whereas Queensland, having adopted a new claims regime in 1994, provided the ACT with the benefit of a steady progression of the statutory claims provisions over time in a relatively stable claims environment, even during the so-called insurance crisis of 2001-02. The Queensland regime presented the ACT with the opportunity to observe consistent application of claims policy over an extended period—an ideal platform for this jurisdiction to use as a basis for change in the ACT.
The second feature of this new legislation that I wish to address briefly today is claims and claims procedures. As I indicated when I introduced the bill in November, the purpose of civil compensation, statutory or otherwise, is to put negligently injured persons back in the position they were in before the injury. The essence of a modern CTP scheme is to provide efficient pathways to treatment, rehabilitation and compensation that meet the expectations of those who pay premiums and those who suffer negligent motor vehicle injury. To deliver that outcome efficiently without imposing injury scales or thresholds or general damages caps requires a significant
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