Motorists can look forward to cheaper greenslips in 2022 when excess insurer profits are returned. A mechanism in the new NSW CTP scheme allows State Insurance Regulatory Authority to intervene when insurer profit goes over 10%. The average saving on a greenslip will be about $19.
What are excess insurer profits?
The regulator decided to use the “clawback” mechanism if insurer profits rose above 10%.
SIRA has been working with insurers to find out the profitability of providing insurance under the new CTP scheme. The new scheme started on 1 December 2017. At first, nobody knew how many claims people might make under the new scheme.
Insurers now have a better idea of the cost of claims and how they will price greenslip premiums.
How will profit be returned?
There will be a 35% reduction in the Fund Levy, equivalent to $91 million in excess profits. As the price of green slips depends on vehicle type and region, the best way to share the savings fairly is via the fund levy.
The mechanism for returning profit will apply to profit on all claims lodged between 1 December 2017 and 31 December 2018. While insurers had a cooling-off period to appeal this decision, none appealed.
What do I have to do?
You do not need to do anything. Any green slip you buy next year will have the final discounted fund levy applied to it.
The average green slip price for people using the greenslips.com.au Calculator has fallen from $699 in the 12 months before the new scheme started, to $549 for the 12 months ending October 2021.
Note: An earlier version of this News item was published 9 November 2021.