Submission cover sheet
Questions on possible options
- What concerns or risks do you see with the proposed actions to reform the premium system?
My concern is this: what are my premiums paying for? The stated coverage is compensation for people injured in a motor vehicle accident including past and future medical treatment and rehabilitation costs, care costs and economic losses, as well as payments for pain and suffering.
The premium is split into 3 sections: the Insurance Premium, the SIRA levy and the Lifetime Care Levy (plus GST).
The SIRA levy is said to pay the cost of public hospital, ambulance and other services for people injured in an accident.
But the Lifetime Care Levy appears to pay for exactly the same: ongoing care for persons injured in vehicle accidents.
And what of the largest component: the Insurance Premium. If the SIRA and LCL levies pay for ambulance, hospital, and ongoing care of motor accident victims.. what does this amount (typically 73% of the total) cover? Or is this pure profit for the insurance company?
- What are your views on the proposed approach to profit normalisation?
- Should the definition of appropriate insurer profit levels be set by SIRA, and if so what considerations should be included?
- Which mechanism(s) do you believe are best to distribute premium super profits back to motorists? Why?
- If insurers make a loss, should they be compensated in a profit normalisation framework? How?
- Should a tolerance level (eg x%) above or below the targeted profit be considered? If so, what would be an acceptable tolerance level?
- What should be done for the insurer who adopts innovation, operates efficiently and makes extra profit as a result of their endeavours?
- What advantages/disadvantages do you see in annual reporting on individual insurer profit by SIRA?
- What advantages/disadvantages do you see in increased transparency in the premium setting process, including making SIRA an approval authority?
- Should there be exclusions, caps, limits or controls on acquisition expenses, including commissions to intermediaries?
At our discretion we may remove parts of submissions because of length, content, appropriateness or confidentiality (privacy) reasons.