Review of CTP motor vehicle insurance point-to-point transport vehicles
We sought feedback on how to reform CTP Green Slip insurance following the growing popularity of ride sharing services.
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The Issue
Consultation period: 10/03/2016 12:00 am to 08/04/2016 12:00 am
In response to the challenges resulting from the introduction of ride-share services into the point-to-point transport market, we started a review of Compulsory Third Party (CTP) motor vehicle insurance for point-to-point vehicles.
This review aimed to ensure that the CTP insurance framework supports ride-sharing services alongside traditional forms of point-to-point transport.
The review explored the more flexible use of current vehicle classes and premium regulations, to support a system that will better reward safer behaviours while ensuring that premiums are, to the extent possible, reflective of the risks associated with different uses of vehicles in point-to-point services.
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Milestones
10 March 2016
A discussion paper on CTP insurance for point-to-point transport vehicles, canvassing six options, was released for public consultation by the Minister for Innovation and Better Regulation
10 March - 8 April 2016
Submissions were open to provide feedback on the discussion paper.
26 April 2016
We hosted a roundtable with stakeholders including insurers, actuaries and point-to-point transport providers to discuss the six options outlined in the discussion paper and the feedback received via submissions on the paper.
There was a high level of stakeholder engagement and the consultation process highlighted a strong stakeholder preference for a move to a greater risk-based approach to premium setting for point to point vehicles, based on vehicle usage. This approach is consistent with the findings and recommendations of the 2015 Point-to-Point Transport Taskforce report.
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Outcomes
The NSW Government announced its broader plan for CTP insurance scheme reform on 29 June 2016. The CTP reforms will deliver Green Slip savings for all road users, including taxis.
The Government has also announced that it will be introducing an innovative new pricing system for taxis and ride-share services that will make premiums fairer and more affordable.
The CTP reform package will provide SIRA with the power to establish a new premium setting process for point-to-point vehicles which will ensure CTP insurance accurately reflects a motor vehicle’s risk and usage, as well as reward safe driving.
Under the new premium arrangements, taxi and rideshare vehicle owners will pay a base premium, plus an additional variable component based on their vehicle usage, which will be collected through in-vehicle technologies such as telematics. SIRA has already been provided with the power to collect necessary data from point to point transport providers to assist in setting usage-based premiums.
The new premium system will enable insurers to offer more flexible and innovative Green Slip insurance products to the point-to-point transport industry, and ensure ride-share operators pay premiums more reflective of their risk, establishing a more level playing field for all point to point transport providers.
Next steps
Consultation with key stakeholders is continuing in relation to the detailed design and implementation of the new premium-setting process, including the timeframe for introduction.
Priority will be given to ensuring that ride share operators transition to the new arrangements as quickly as possible after the broader CTP reforms are enacted.