The Federal Government has taken a leading role in the issue of rising cost of public liability insurance even though many of the forms of relief being publicly canvassed, such as the capping of claims, fall within the jurisdiction of the States and Territories.The Minister for Revenue and Assistant Treasurer, Senator the Hon Helen Coonan, hosted a meeting of State and Territory Ministers and the Australian Local Government Association on 27 March this year.
Trowbridge Consulting reported to the meeting on the increased premium prices and difficulties in obtaining insurance of any kind for some activities. The paper canvassed a range of possible responses.
The Ministers’ meeting issued a communique canvassing a twelve pronged response focussing on the following.
- Structured settlements.
- Reform to claims costs.
- Examination of trade practices and related acts.
- Group buying where appropriate.
- Further information from the insurance industry.
- Widened data collection.
- Advice on risk management practices.
The full text of the communique is on the Treasury website at assistant.treasurer.gov.au/atr/default.asp. The Council of Australian Governments endorsed the Ministers’ approach at its meeting in early April.
Federal Treasury officers are now taking an active role in the Heads of Treasury Insurance Working Group to help develop practical measures to address the problem both in the short and the longer term. Responses to date include the States and Territories agreeing to amend legislation where necessary to remove the barriers to structured settlements as an alternative to lump sum payments.
This will ensure severely injured people are not discouraged from taking a structured settlement rather than a one-off lump sum by the tax treatment of a settlement. More details on this are available from the Assistant Federal Treasurer’s web site at assistant.treasurer. gov.au/atr/.
The States and Local Government have also contributed to the development of coordinated responses. Group public liability insurance schemes are being pursued in Victoria as well as legislative amendments to protect volunteers against civil liability arising out of their activities as volunteers which came into effect on 15 January 2002 in South Australia. For more details of the Victorian proposal contact Gavin Mahoney at the Municipal Association of Victoria on (03) 9667 5564.
The South Australian legislation can be found at www.parliament.sa.gov.au/legislation. One initiative by the Insurance Council of Australia is a service through Insurance Enquiries and Complaints Limited to assist people with information about public liability insurance. The service provides information about group buying and the use of brokers to find cover, suggest possible avenues for pooling arrangements and provide information about risk management. The service can be contacted on 1300 363 683.
Everyone with a stake in this issue needs to own part of the problem and do their bit to develop a solution.
The Victorian Government provides the Secretariat for the Heads of Treasury Working Group and reports through the Victorian Government Department of Treasury and Finance. Updates on progress are available at their website on www.dtf.vic.gov.au.
