Earlier this year, SIRA commenced a review of the CTP Scheme premium system in response to the recommendations of the Insurer Profit Review. The premium system review has the aims of:
- Improving the affordability of premiums for vehicle owners.
- Reducing the opportunity for excessive profits for insurers.
- Increasing competition between insurers and encouraging new entrants.
The premium system review complements other initiatives to improve the fairness and affordability of the CTP Scheme, including the proposed reforms to CTP Scheme coverage and benefits, and the establishment of the CTP Fraud Taskforce.
At its meeting on 9 September 2016, the Board considered the key issues and options in the re-design of the CTP premium system, and agreed to convene a Board workshop to review actuarial modelling of the options to assess their impact on premium levels for different classes of driver and vehicle.
The Board also considered data on payments made by insurers to high-volume, low-risk customers such as motor dealers and fleet owners. The Insurer Profit Review recommended insurers be required to report these costs to assist in determining whether a cap should be applied on these payments.
Other issues considered at the September Board meeting included;
- The Board considered the report of the Legislative Council Standing Committee on Law and Justice on its first biannual review of the CTP Scheme since SIRA was established. It was noted most issues raised in the Committee’s report will be addressed in the proposed reforms to the CTP Scheme and the review of the CTP premium system.
- The Board reviewed the draft Workers Compensation Financial and Premium Supervision Discussion Paper. The Discussion Paper seeks stakeholder comments on the proposed approach to premium setting for 2016/17 and proposed regulations for prudential standards for insurers. The Discussion Paper will be published on the SIRA website and submissions invited.