SIRA is clawing back $178.7 million in excess profit from CTP insurers, after again activating the transitional excess profit and losses (TEPL) mechanism.
SIRA Chief Executive Adam Dent said that the claw back has taken excess profit insurers earned on the sale of compulsory Green Slips.
“SIRA is recovering a record $178.7 million in excess insurer profit earned in 2018 and 2019,” Mr Dent said.
“This amount represents pure profit taken by insurers, above a 10 per cent profit margin, after injured road users receive the treatment and care they need.
“In the face of rising cost pressures, the profit will be used to maintain the affordability of Green Slips.”
Two levies that form part of the cost of Green Slips are set to increase from 15 January 2023.
The Motor Accident Injuries Treatment and Care Benefits Fund levy will rise by 47.3 per cent and the Lifetime Care and Support Authority Fund levy by 19.9 per cent.
Mr Dent said that by recouping excess insurer profit NSW motorists will be less affected by the levy changes.
“The $178.7 million of insurer profit being injected into the Motor Accidents Operational Fund will help offset the levy changes and maintain the savings introduced from the claw back of insurer profit in January 2022,” Mr Dent said.
“Green Slip prices continue to be an average $19 lower as a result of the $91 million SIRA clawed back from insurers in the last profit assessment cycle.”
The claw back was made possible through the introduction of the TEPL mechanism in the 2017 CTP reforms which allows SIRA to control the level of profit insurers earn on the sale of Green Slips.
The need to claw back insurer profit should lessen as insurers begin to understand the volume and cost of claims made under the 2017 motor accidents scheme and price Green Slips accordingly.
For this assessment cycle, two insurers received preliminary approval for innovation support that could allow them to retain a small portion of their profit.
State Insurance Regulatory Authority SIRA can grant innovation support when insurers invest in measures that improve outcomes for injured road users or road safety for motorists.
To receive final approval these innovations must be proven to deliver measurable benefits.
