The Motor Accidents Authority of NSW (MAA) has released estimates of greenslip prices under the proposed new CTP greenslip scheme.
The estimates are set out in an actuarial report by Ernst & Young (E&Y), “Estimated Cost Per Policy of the Proposed NSW Green Slip Scheme”, dated 29 July 2013.
Estimates for 2014 include the following:
1. Average Greenslip Cost under the proposed scheme down by $97.00, form $571.00 under the current scheme to $474.00 under the proposed scheme.
2. Average cost savings of around 15% per greenslip (excluding any reduction in the MCIS Levy) under the proposed scheme.
3. Without reforms the current scheme cost could increase by about 10%.
4. Scheme Affordability (Greenslip Cost as a proportion of Average Weekly Earnings) improved from 39% under the current scheme to 32% under the proposed scheme.
Estimates are for Class 1 vehicles (motor cars) and assume a mature scheme. Price estimates exclude GST.
The E&Y report provides estimates on the basis of the Motor Accidents Injuries Amendment Bill 2013, which sets out the detail of the proposed new scheme, as it currently stands. The Bill was introduced to parliament in May 2013. The government was not able to secure passage of the Bill through parliament and there has been considerable criticism from stakeholders. A roundtable was held on 24 July to discuss the Bill. As a result of the roundtable and ongoing consultation, there may be amendments to the Bill, particularly in the areas of benefits for children and legal representation. The E&Y estimates will be affected by any amendments to the Bill.
At the roundtable, participants were critical of the government for not having released the estimates, particularly as the estimates were a large part of the government’s justification for the reforms. Insurance Council CEO Robert Whelan said “We can’t guarantee the extent to which premiums will go down. The reason for that is we don’t have clarity around the claims position on this new scheme.”
In his Media Release of 31 July 2013 announcing the release of the estimates, Andrew Constance, Minister for Ageing & Disability Services said that he will continue to consult with stakeholders on their concerns and that he is “awaiting the advice from the CTP roundtable chair Paul McClintock and the steering committee, which is overseeing any further work needed to refine amendments to the Bill.”
At the roundtable, the Minister said that he wants the government's position on the reforms resolved by the end of August.