New South Wales Legislative Council questions and answers

0178 COMMERCE—EXCESSIVE INSURER PROFIT FOR MOTOR ACCIDENT CLAIMS—Dr Chesterfield-Evans to ask the Minister for Commerce, Minister for Finance, Minister for Industrial Relations, Minister for Ageing, Minister for Disability Services, and Vice President of the Executive Council—

(1) With regard to the finding in the Seventh Report of the Standing Committee Law and Justice into the operation of the Motor Accidents Scheme, tabled last week, that "estimates of profits likely to be realised on premiums written in accident years to date significantly exceed the profit margins approved by the Motor Accidents Authority prior to those premiums being written", is the Government prepared to protect excessive insurance profit for insurers at the expense of fair compensation for people injured in motor accidents?

(2) If so, why?

Answer—

(1) No. The Seventh Report of the Standing Committee on Law and Justice examined this issue in detail and concluded that the "Committee is satisfied that the primary reason for the discrepancy between profit margins contained in CTP filings and the MAA's estimate of the profit likely to be realised on those premiums is the fall in the risk premium between 1999 and the present". Further, the Committee indicates in its report that "no reasonable participant in the CTP industry could have predicted the fall in claim frequency". Importantly, the Committee also concluded that as "the MAA is required to ensure that the motor accidents scheme is fully funded from year to year, the MAA acted reasonably in ensuring that premium prices 'chased' the fall in claim frequency downwards, rather than racing ahead of the fall in claims frequency." The Government has also recently implemented the first stage of an historic expansion of scheme benefits to assist children, the catastrophically injured and their families. Since 1 October 2006 the scheme now covers children aged up to 16 injured in a motor vehicle accident, regardless of who was at fault, for their necessary medical treatment, rehabilitation and care expenses, including lifetime care for those very seriously injured. This major improvement to scheme benefits will culminate next year with complete coverage for the lifetime care of everyone catastrophically injured in motor vehicle accidents.

(2) Refer answer to question (1) above.

0379 INDUSTRIAL RELATIONS—WORKCOVER SCHEME SURPLUS—Ms Hale to ask the Minister for Commerce, Minister for Finance, Minister for Industrial Relations, Minister for Ageing, Minister for Disability Services, and Vice President of the Executive Council—

(1) Did the WorkCover scheme run a $2 billion plus surplus in the last year?
(2) What was the change in scheme revenues and expenditure on injured workers between last year and the previous year?
(3)
(a) Will the Government apply the WorkCover scheme surplus to injured workers?
(b) If not, what will the surplus be spent on?