RACQ Insurane says it will cease participating in the Queensland compulsory third party (CTP) scheme from the start of October, saying a current scheme review is unlikely to deliver “a level playing field”. 

The decision is pending approval from the Motor Accident Insurance Commission (MAIC), which oversees the scheme. CTP cover is also provided in Queensland by Suncorp, Allianz and QBE. 

RACQ Insurance has been urging the Queensland Government to consider introducing “premium equalisation” to the scheme, given that under current arrangements an insurer can’t choose which risks to underwrite or refuse a motorist who selects it for the cover. 

The insurer has argued it’s disadvantaged by a portfolio that has a greater portion of older vehicles, young or inexperienced drivers, shorter policy terms and re-registered vehicles compared to other insurers. 

“Following several years of raising concerns with the State Government and MAIC, it’s clear that even the most recent scheme review is unlikely to achieve a level playing field or restore fairness across the insurers,” Group CEO David Carter said.  

“The unfortunate reality is despite the extensive steps we have taken over many years to improve our position, including support provided by our reinsurance partners, it is no longer viable for us to continue participating in the scheme.” 

MAIC says the decision to withdraw from the scheme is a commercial decision for RACQ Insurance and it’s considering the request. 

“RACQ’s existing CTP insurance policies would be reassigned from the next registration renewal date after the withdrawal takes effect, meaning there will be no impact on motorists or premium prices,” it said.   

“If RACQ’s withdrawal is approved, we will consult with insurers and the Australian Prudential Regulatory Authority on this.” 

MAIC says it will work with RACQ Insurance and the Department of Transport and Main Roads to deliver a smooth transition. 

Mr Carter says the CTP change doesn’t affect the insurer’s other products in any way, or its commitment “to providing Queenslanders with motor and home insurance now and into the future”.