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Part 2 of the Motor Accident Guidelines: Market practice

Market practice


2.1 Table 2.1 shows the meanings of terms used in this part of the Motor Accident Guidelines.

Table 2.1: Terms used in this part of the Motor Accident Guidelines



Distribution channel

A mechanism or method through which licensed insurers issue and administer third-party policies. This can include but is not limited to agents, telephone call centres, the internet and over-the-counter operations.


The electronic notification of a third-party policy by an insurer to Roads & Maritime Services.

Input Tax Credits (ITC)

That is, the credit an entity registered for GST can claim for any GST included in the third-party premium paid.

Roads & Maritime Services (RMS)

A NSW statutory authority constituted by the Transport Administration Act 1988 (NSW).


2.2 The Guidelines are issued under Part 9, Division 9.2section 9.16 of the Act, to provide the regulatory framework for issuing of third-party policies by licensed insurers.

2.3 These Guidelines are principles-based. They articulate a set of objectives for issuing of third-party policies and expectations for standards of market practice for insurers. The Authority’s adoption of principles-based regulation of market practice is intended to:

(a) encourage flexibility and innovation in the delivery of services to third-party insurance customers

(b) promote a competitive market for all insurers and encourage insurers to act in good faith when interacting with customers.

2.4 Insurers’ market practice, including distribution arrangements, must align with these Guidelines and not contravene these Guidelines.

2.5 To further assist compliance with these Guidelines, the Authority may publish practice notes.

Commencement and recovation of previous Guidelines

2.6 These Guidelines are effective for market practice from 18 December 2020 and will remain in force until they are amended, revoked or replaced in whole or in part.

Application of these Guidelines

2.7 The Authority will monitor and review compliance with these Guidelines, which may include audits of insurers from time to time.

2.8 Internal auditing of compliance with these Guidelines must form part of each insurer’s own risk management and compliance program. Insurers have a responsibility to report to the Authority any results of audit programs conducted on issuing third-party business.

2.9 If the Authority regards an insurer or any intermediary acting on behalf of the insurer as having breached the Guidelines, the Authority may take regulatory and enforcement action, in accordance with its regulatory and enforcement policy.

2.10 All contracts or arrangements entered into by the insurer in relation to a quote and sales services for third-party policies must comply with these Guidelines.

Guiding principles

2.11 When issuing, administering or renewing third-party policies, the insurer and their agents must:

(a) act in good faith with all customers

(b) use processes and business practices that do not unfairly discriminate against individual customers or groups of customers

(c) engage in processes and business practices that are transparent and practical for the purpose of issuing policies to customers

(d) make third-party policies readily accessible and available to all customers.

Acting in good faith

2.12 The Authority’s regulation of premiums includes an element of community rating, as some policies are underpriced and others overpriced relative to insurance risk. Accordingly, it may be in the insurers’ financial interests to build portfolios that are overweight in low risk (overpriced) policies. Notwithstanding such financial interests and the REM, under Division 2.3, section 2.24 of the Act, insurers must make third-party policies available to all customers in a manner that complies with all of the guiding principles. In particular:

(a) insurers and their agents are required to issue policies to all properly identified vehicles

(b) insurers must avoid distribution methods and sales techniques that prejudice this obligation in any way.

Processes and business practices that do not unfairly discriminate

2.13 Insurers and their agents must use processes and business practices that do not unfairly discriminate against individual customers or groups of customers. This applies to each distribution channel.

2.14 Each insurer and its agents must apply reasonable service standards to their processes and business practices. The Authority may impose standards or restrictions on any or all insurers and their agents for specific or general circumstances where it is considered to be in the public interest.

2.15 With the exception of pricing differentiation permitted under Part 1 of the Motor Accident Guidelines: Premium determination, the insurer and their agents must treat customers in the same manner, irrespective of the risk profile of the vehicle or its owner, or the terms of the policy.

2.16 All existing customers who are due to receive a renewal notice must be provided with a renewal notice/offer within the prescribed timeframes as specified in this Part of the Guidelines. A delay in sending renewal notices may only occur with prior approval from the Authority.

2.17 Insurers must not refer customers to other insurers or encourage customers to take their business elsewhere. Agents must not refer customers to insurers unless they have an agency arrangement with them.

2.18 Insurers must not advise customers of the prices offered by other insurers. Agents must not advise customers of prices offered by insurers unless they have an agency arrangement with them.

Transparent and practical processes and business practices

2.19 All information provided to customers must be clear and accurate, expressed in plain language and not in any way misleading.

2.20 Insurers and their agents must only charge premiums as filed and approved by the Authority. Insurers are to categorise vehicles correctly and charge the correct filed premium for that category. In order to charge the correct premium, insurers and their agents must take into account all risk factors approved by the Authority and the ITC status used to determine the customer’s premium.

2.21 All agents contracted by an insurer to provide quotes and sales must ensure they disclose to customers the identity of all insurers they have a commercial arrangement with before they proceed with quotes or sales. Neither the insurer nor their agent may enter into a commercial arrangement with another agent or third party that accesses data from the Authority’s Green Slip Price Check without the relevant insurer first obtaining the Authority’s permission. The Authority will not unreasonably withhold such permission.

2.22 Where requested by a customer, insurers must act promptly and expeditiously when sending documents by mail or electronically:

(a) all documents agreed to be sent by mail must be lodged with Australia Post within three business days of agreeing to do so

(b) all documents agreed to be sent electronically must be sent within 24 hours of agreeing to do so

(c) should technology outages occur, the documents must be sent within 24 hours of the insurer’s systems being repaired.

2.23 Offers of renewal, including eRenewals, must be sent at least four weeks and no more than six weeks in advance of the expiry date.

2.24 All information regarding third-party policies must be sent to each customer by post unless they have consented to receiving policy information electronically.

2.25 Where an incorrect address has been used, including returned letters and failed emails, insurers must take reasonable steps to correctly issue the policy information.

2.26 When a customer purchases a third-party policy or renewal or new registration, the insurer must electronically transmit an eGreenSlip to RMS within the timeframes shown in Table 2.2. Regulatory relief timeframes apply during the health emergency caused by the COVID-19 pandemic in the period starting on 17 April 2020 and ending on the day that is 12 months after that date.

Table 2.2: Timeframes for insurers electronically transmitting an eGreenSlip

Method of payment


Regulatory relief during COVID-19 pandemic

Directly to the insurer via a branch, telephone or electronic means

Within 1 hour of payment

Within 48 hours of payment

To the insurer’s agent, including Australia Post

Within 5 business days of payment

Within 7 business days of payment


Within 3 business days of payment

Within 5 business days of payment

By mail to the insurer

Within 5 business days of the date of postage

Within 7 business days of the date of postage

2.27 A written quote or a renewal notice/offer for a third-party policy must:

(a) clearly communicate all relevant pricing factors applied to the third-party policy or quotation

(b) provide information about how to raise any incorrect pricing factors with the insurer or its agent, before the purchase

(c) disclose the name of the licensed insurer and if they operate under a trading name that is different from the licensed insurer name, the quote or offer must disclose both the trading name and the insurer name

(d) provide contact details for third-party policy queries

(e) detail the timeframe for eGreenSlips to be sent to RMS, including the timeframe associated with purchasing through different channels.

2.28 Common Expiry Date Fleets and Multiple Expiry Date Fleets are exempt from the transparency requirements of pricing factors. Private use vehicle classes 1, 10 and 3c are not exempt and must show the pricing factors used on Green Slips. For example, age of youngest driver, age of vehicle etc.

2.29 All customer communication must include any information required by the Authority. Insurers must ensure they and their agents use specific scripts when required by the Authority.

Readily accessible and available

2.30 Third-party policies (both quotes and sales) must be readily accessible and available to all customers. Insurers are required to give prompt, uniform access and availability to all customers who approach them, irrespective of the risk characteristics of the vehicle and its owner. Insurers may use a range of distribution channels provided that every customer has ready access to their third-party policy through at least one of those channels. Insurers must not use distribution channels to avoid sales. In particular:

(a) insurers and their agents must not refuse to provide a third-party quote for any motor vehicle required to be insured under the Act

(b) insurers and their agents must provide customers with the ability to obtain a quote for any vehicle or vehicle class without the need to identify themselves or their vehicle’s registration number

(c) insurers and their agents must make reasonable efforts to help customers provide accurate information to determine the correct premium

(d) insurers must provide customers with at least one payment option for a quote or renewal offer that is available 24 hours a day, seven days a week.

Schedule 2A: Circumstances for refusal to provide a third-party policy

2.31 This schedule relates to the section ‘Readily accessible and available’.

2.32 Insurers and their agents may refuse to issue a third-party policy in the following circumstances:

(a) where the customer does not pay the required premium, the Fund levy and GST, for the third-party policy within the timeframe as agreed between the customer and the insurer or agent

(b) where the vehicle is recorded as a statutory written-off vehicle on the NSW written-off vehicles register (WOVR)

(c) where the customer is seeking to purchase a new third-party policy from an insurer and the customer does not provide the correct key identifiers used to locate and retrieve information held by RMS.

2.33 Key identifiers are:

(a) registration ID (also known as billing number) and plate number, or

(b) a combination of a customer identifier, one of:

  • NSW driver or rider licence number of the vehicle owner
  • NSW photo card number
  • RMS customer number, and

a vehicle identifier, one or a combination of:

  • vehicle identification number (VIN)
  • chassis number
  • engine number
  • plate number.

Breaches and temporary regulatory relief arrangements

2.34 Insurers must notify the Authority of any breach of these Guidelines.

2.35 The Authority may consider a temporary relief from an enforcement response if an insurer is unable to issue timely third-party policy renewals due to unforeseen system issues.

2.36 An application for temporary regulatory relief can be made in writing to the Authority at any time. The Authority will take into account:

(a) the reasonableness of the request

(b) the length of time the relief is requested

(c) community requirements and priorities

(d) other relevant factors.

2.37 The Authority will respond to requests in a timely manner and, where appropriate, work with the insurer to help it comply with the Guidelines as soon as possible.