Page 4166 - Week 10 - Tuesday, 21 September 2010
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It is good governance to have an authority regulating the insurance provider market to ensure good outcomes for consumers who are at a natural disadvantage in insurance contract transactions, none more so than CTP insurance. The functions are proportionate and adapted to the ACT situation, and I am pleased to be able to support the proposed regulatory structure. I am also encouraged by the news that it is now very likely that we will have in the not-too-distant future new insurance providers in the ACT market and the price benefits that competition brings to consumers.
In regard to price benefits, the transparency provisions are particularly worth mentioning. The new disclosure requirement is, indeed, a positive step forward that will ensure that the community has a far better understanding of why CTP costs what it does and the various components that make up their registration costs each year. I am pleased that the act will now explicitly set out the functions of the regulator and that we have a better articulated framework to deal with issues in our CTP scheme.
One issue that I would briefly like to mention is costs orders for small claims. The current limitations on general damages and discretion on costs awards means that there is an argument that the current act discriminates against low income earners. This issue has been raised by the Law Society and the human rights commissioner. I think it is appropriate for me to say that, whilst we do recognise that we have to balance the need to process claims efficiently, this is an issue that the Greens are concerned about and eager to work with stakeholders on. I think it is a positive step forward that we now have a regulatory authority with a defined role which includes addressing issues such as this.
As I said, the Greens are pleased with the improvements that have been made to the scheme and are happy to support this step in the process towards an insurance framework that not only provides insurance at a reasonable cost for all Canberrans but also delivers the best possible outcomes for those who are injured in motor vehicle accidents.
The other minor issue to address is the small changes to the Nominal Defendant fund. Again, the Greens are happy to support these changes and agree they do improve the governance of transparency of the fund.
I would like to take the opportunity to thank the department, particularly Tom McDonald and Ellen Lukins, for the briefing provided to my staff and me. I am sure that no-one underestimates how complicated insurance regulation can be, and I thank them for their time and effort in explaining the application of and reasons for the proposed changes. The Greens are pleased to support the bill.
MS PORTER (Ginninderra) (10.18): This bill continues the reforms of the ACT compulsory third-party insurance scheme begun by the Road Transport (Third-Party Insurance) Act 2008. Members will see the definition of “risk premium” in the bill before us today. The risk premium in the ACT is around $367, which is the baseline risk of any insurer based in insuring a vehicle for CTP here, yet the premium is $487.50. Why? There are a number of reasons, and the usual suspect—insurer profit—is not one of them.
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