The Corporations and Markets Advisory Committee – an expert group that advises the federal Treasury – says directors' and officers' (D&O) premiums have risen up to 50% a year since 2001.

A new report from the committee which highlights the problem is the first step in a broader review of directors’ duties and personal liability. The committee took into consideration an Aon report from December, which said the market for D&O liability and company reimbursement cover in Australia had shrunk substantially in the past three years.

The Aon paper says premiums for D&O insurance have risen 35-50% a year since 2001, and even more for the less-attractive risks.

The report says greater competition will mean increases of about 10% for unchanged risks for the rest of this year.