ICA backs Government review response

ICA backs Government review response | Insurance Business

ICA backs Government review response
The Insurance Council of Australia (ICA) has strongly endorsed the Federal Government’s support for “a fresh phase of competition reforms to drive economic growth and productivity.”

The Government response to the Harper Review of Competition Policy, issued by Treasurer Scott Morrison, identified reform to competition as a vital support to an innovative national economy and the ICA CEO Rob Whelan, backed the Government response.

“The ICA welcomes Treasurer Scott Morrison’s commitment to work with the states and territories to reach agreement on nationally consistent competition reforms, and hopes this issue will be seriously considered," Whelan said.

“The ICA and its members look forward to further discussions with governments at all levels on how competition reform can drive economic growth, innovation and productivity gains to benefit all Australians.”

The Council identified state and territory Government monopolies on personal injury insurance as a contrary activity to the proposed competition reforms and Whelan stressed that the Government needs to act quickly.

“Ten years ago, the Productivity Commission report on National Competition Policy Reforms described government monopolies in statutory insurance as 'unfinished business',” Whelan continued.

“Despite that, four of Australia’s eight state or territory workers’ compensation schemes are still underwritten by government. Five of the eight personal injury motor insurance schemes are also protected from competition.

“The ICA calls on governments with monopoly schemes to consider the benefits of competitive markets for workers’ compensation and motor accidents insurance.”

Whelan called on Governments across the country to follow the same industry prudential and regulatory requirements of other insurers as competitive underwriting in this space could prove of great benefits to each state and territory.

"If governments wish to be an insurer in these schemes, the principle of competitive neutrality provides that they should be subject to the same prudential and other regulatory requirements as general insurance companies,” Whelan said.

“Competitive underwriting for these schemes will remove the financial risk to governments, taxpayers and future policyholders. It will drive innovation, and provide choice for consumers.”