Opposition financial services spokesman Stephen Conroy has criticised the insurance industry for not passing back the benefits of tort reform after achieving the best profits in two decades.

IAG, Suncorp, QBE and Promina have reported record profits for the recent half-year, and Senator Conroy says the Australian Competition and Consumer Commission (ACCC) should have the power to ensure consumers receive savings.

“It was suggested 18 months ago that tort reform would ensure 14% reductions in general insurance premiums, but Labor argues there has been no fall,” he told Sunrise Exchange News yesterday. “That’s because the ACCC hasn’t been given proper powers to make this occur.”

Senator Conroy says an ALP private member’s bill would extend the ACCC’s powers and provide for fines up to $10 million if insurers didn’t pass back benefits. “The sort of powers that are needed are similar to those before the GST was brought in so that no profiteering occurred.”

The latest ACCC report – the second in a series ordered by the Federal Government to ensure that prices are monitored and benefits are being passed back to consumers – shows that increases in public liability and professional indemnity premiums have been slowing since 2002.

The report shows an increase in public liability premiums of about 17% in 2003 compared with 44% in 2002. Professional indemnity premiums increased about 15% in 2003 compared with 29% in 2002.

But Senator Conroy doesn’t believe that is enough. “The report shows a drop in the level of premium increases – not a deduction.”

The Insurance Council of Australia does not accept that a healthy reporting season is the result of tort reform to limit liability. Deputy CEO Dallas Booth said the industry “didn’t need tort reform to boost profits”.