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A new private CTP scheme for South Australia

South Australian (SA) motorists will from 1 July 2016 get compulsory third party (CTP) vehicle insurance from four private CTP insurers, rather than the Motor Accident Commission (MAC).

From 1 July 2016, four private insurers will provide CTP insurance:

  • AAMI (part of the Suncorp Group)
  • Allianz Australia Insurance
  • QBE Insurance
  • SGIC (part of IAG).

Motorists in SA will be allocated one of the four insurers for the first three years of the scheme. In the fourth year, new approved insurers can enter the scheme. Motorists may then choose a new insurer or continue with the one they were allocated.

A seamless transition

The SA government believes CTP insurance is better managed by the private sector so it can focus on upgrading and maintaining safe roads.

The Transport Department will continue to issue CTP renewal notices and collect premiums as part of vehicle registration.

Treasurer, Tom Koutsantonis, said CTP prices will be fixed for the first three years with small increases of about 3% each year. In his view, this model “provides a seamless transition for SA motorists”.

CTP regulation

Currently the MAC is the sole provider of CTP insurance in South Australia.

MAC will manage all CTP insurance claims up to 30 June 2016 through its claims manager, Allianz. After that date, it will continue to act only as Nominal Defendant and in its non-commercial activities, such as road safety programs and emergency services.

The SA government will establish a new CTP regulator to make sure CTP insurance remains fair and affordable for all.

Role of insurers

Insurers will make an upfront payment of $260 million to participate in this new privatised market. After that, they will contribute a further $1.55 million in the first three years for road safety. They will also be supporting local employment, training, and community programs.

What will not change

The SA government looked to Queensland, New South Wales and Australian Capital Territory, for best practice examples of privatised CTP insurance schemes. But certain aspects of the current CTP scheme will not change.

Private insurers will still have to provide the same level of coverage as that provided now by the MAC.

When asked whether premiums had risen in other states where private CTP schemes were introduced, the government said other states had managed to keep the price of premiums affordable within target ranges of average weekly earnings.

This new CTP scheme will not affect operation of the Lifetime Support Scheme because they are completely separate. The Lifetime Support Scheme will continue to provide lifetime treatment, care and support to all motorists catastrophically injured in a road accident, regardless of fault.

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