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Legislative Assembly for the ACT: 2001 Week 4 Hansard (28 March) . . Page.. 995 ..

MR HUMPHRIES (continuing):

Perhaps we need to address the threshold question of what steps we would take to differentiate the group training companies here from those others that would, I suspect, inevitably come through the door once we have provided this relief to these particular people.

I do not know what the response of the insurers will be to this step fixing a maximum rate of 15 per cent. My understanding is, and I am open to being corrected about this, that those who offer insurance in the ACT have an obligation to offer it to anybody who is prepared to pay the premium, so the option of a company simply saying, "We are not going to carry this sort of insurance anymore," is not available.

So if a business is actually operating and providing insurance to companies or businesses in the ACT, they must insure a person who pays the premium. Their protection, up until now, has been that they can charge a premium that reflects the difficulty of offering insurance in that area. With the passage of this motion and the change in the law, that option disappears. I suppose that, given the state of play as I understand it, it would then be necessary for an insurer wishing to avoid that liability, that necessity to insure a person in these circumstances, to actually evacuate the ACT altogether, that is, cease to insure anybody in the territory, in order to escape that liability.

I suppose I have to say that Mr Osborne has carefully assessed this matter and has made the judgement-probably one I would agree with-that an insurer, or a few insurers, who cover the small number of group training companies in the territory-I think there are three, but I would not be dogmatic about that-would not want to pull out merely because they were running a loss on those three companies. That is what I suppose would be the reaction of those companies but, of course, I do not know.

I do know that the companies concerned, or at least one of those companies, has very serious concerns about the proposals. I will now quote from a letter that Allianz Australia Insurance Limited wrote to the government about this matter, in which they have argued that this measure would be a serious erosion of the principles under which insurance is offered in the ACT in terms of workers compensation. (Extension of time granted.)

The author refers to legislation here, but I assume he means the motion. This is a letter from Mr Michael Taig, General Manager, Underwriting Operations, Workers Compensation Division, Allianz Australia, to Mr Craig Simmons in the Department of Urban Services. He says:

Additionally legislation should describe the underpinning principles for premium setting. We are detailing in the attachment what we believe are fundamental principles; these are based upon the principles agreed by the key stakeholders involved in the New South Wales reform process during 1998.

And he goes on further to say:

If the private member's bill is being advanced with the objective of protecting employment in ACT then we feel the causation of the problem (ie poor claims history) should be addressed rather than trying to treat the effect (ie potentially high insurance premiums).

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