Motor Vehicles (Compulsory Third Party Insurance) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 28 February 2019.)

The Hon. K.J. MAHER (Leader of the Opposition) (16:40): On behalf of the opposition, I rise to support the majority of this bill; however, the opposition will be seeking minor amendments. In 2016, the former Labor government approved four private insurers to underwrite the compulsory third party scheme and established an independent CTP regulator to oversee insurers and the scheme. Since 1 July 2016, motorists' CTP insurance policies have been automatically allocated to approved insurers. This autoallocation will no longer apply after the expiry of the transitional period on 30 June 2019, hence the need for this bill.

This bill enables the continuation of the autoallocation for new vehicle CTP policies after the commencement of the competition model, with the autoallocation to occur based on a scheme to be determined by the minister rather than enshrined in legislation or regulation. The proposed autoallocation scheme will allocate new vehicle policies according to approved insurer market share at the lowest premium price offered for the premium class by any of the approved insurers at the time of the allocation, with autoallocation not applying to the renewal of CTP policies.

Under the competitive CTP scheme, insurers may compete for customers through offering value-added goods and services, also known as inducements. The bill allows for insurers to offer direct policy holder benefits, that is inducements, as approved by the minister. Such inducements will be required to be approved by the minister to ensure they benefit motorists, which it appears will be done on a case-by-case basis instead of being prescribed in law.

Inducements that are offered in other Australian jurisdictions include at-fault driver protection policy, multipolicy discount, reward program membership and gift cards. The bill provides significant discretion for the minister to approve inducements rather than requiring inducements to be approved by regulation. The opposition is seeking amendments to be supported to require the inducements to be regulated in order to increase transparency and safeguards.

Debate adjourned on motion of Hon. T.J. Stephens.