State governments will introduce legislation to potentially reduce public liability insurance premiums by around 13.5% as part of a national strategy to make insurance more affordable.
Today's meeting of state treasurers in Brisbane, chaired by Federal Assistant Treasurer Senator Helen Coonan, agreed to implement most of the Ipp
report reforms, which recommended limits to payouts and developing a culture of individual responsibility.
An actuarial assessment by PricewaterhouseCoopers found the 16 Ipp recommendations dealing with quantative cost reductions has the potential to lower public liability insurance premiums by around 13.5% and medical indemnity insurance premiums by between 15 and 18%.
Coonan says the
Trades Practices Act 1974 will be amended to complement state and territory law reform.
"Professional indemnity insurance was also discussed at length and there was strong agreement on proportionate liability for economic loss with some jurisdictions firmly committed to implementing legislation and others close to finalising their positions," she says.
"It was agreed that the issue of capping legislation and risk management via professional standards legislation should be considered in detail as part of the ministerial forward work program."
However, relief for small businesses and community groups struggling with massive premium hikes will have to wait until law reform takes effect, with Coonan likening the process to drip water torture.
Legislation in Queensland is not expected to be passed until the first session of Parliament next year, with the legislation to be presented before Christmas, Treasurer Terry Mackenroth says.
Insurance Council of Australia executive director Alan Mason, who attended the meeting, says the uniformity of legislation will be a major contributor to the reduction of premiums as plaintiffs will be met with similar levels of damages.
"If different causes of action produce different outcomes in terms of the level of damages awarded, it is inevitable that plaintiffs will pursue the most generous path and the impact of reforms is reduced," Mason says.