Page 1106 - Week 04 - Tuesday, 5 April 2016
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MR BARR: I move this afternoon to table a report into the review of the Road Transport (Third-Party Insurance) Act of 2008. Under section 275 of the act, there is a review of the operation of the act that is required, and I present the report of the review to the Assembly.
This is the second report into the operation of the compulsory third-party insurance—CTP—CTP, scheme. The first review, following the commencement of the act in October 2008, was tabled in the Assembly on 20 March 2012. I note that section 275 requires that I present a report on the review within three months after the review is started. The review was commenced in accordance with the act on 1 January 2016. As such, the report was required to be presented before 31 March 2016. As the act does not contain any provision for an out-of-session circulation, this was the first available sitting week after the report was completed in mid-March.
Section 275 provides that “a review of the operation of the CTP act be undertaken”. It does not provide criteria or terms of reference. The overarching terms of reference established for the review are as follows: review the operation of the act over the three years to 31 December 2015 and report on the extent to which the more quantitative-related CTP scheme objectives have been achieved. The quantitative-related objectives were selected from section 5A of the CTP act, which provides the objects of the act.
The independent review of the CTP act was undertaken by the CTP scheme actuary. The scheme actuary provides actuarial analysis and services to the CTP regulator. The actuary was selected to undertake the review because of his understanding of the ACT’s scheme design and extensive knowledge of schemes operating in other jurisdictions.
I note that the review period contains two very important changes to the CTP scheme: firstly, the commencement of competition, with three Suncorp brands providing CTP insurance in the ACT from 15 July 2013; and, secondly, from July 2014, the introduction of the lifetime care and support scheme.
I am pleased to report that the review found that amendments made to the CTP scheme by the government have led to an improvement in the operation of the CTP scheme. In July 2013, three new CTP insurers—GIO, AAMI and APIA—entered the CTP scheme alongside the NRMA. Right from the outset the Suncorp entities were competitive, offering after-market rebates on CTP premiums of between $20 and $75, and offering discounts on non-CTP premiums when packaged with a CTP product. In setting out to increase market share, the Suncorp brands began lowering premiums from March 2015, and have continued to lower premiums, with more premium reductions starting a few days ago, on 1 April 2016.
The review found that the ACT CTP market is price sensitive, with relatively small reductions in premiums leading to increased market share for the respective brands. The market share of the three Suncorp brands was initially around 10 per cent. From January 2015, GIO’s premiums fell below those of the NRMA, with market share for the Suncorp brands increasing to around 45 per cent of CTP premiums written. The
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