Well, now we know what the insurers want for a balanced public liability regime. The Insurance Council released its submission for tomorrow’s national Commonwealth-states summit with a call for a radical rethink. Included in the ICA ideas are suggestions on altering public liability claims, a reform of insurance taxes and billing Medicare for payments for “pain and suffering” and reimbursements of medical costs.

ICA says the calculation of non-economic damages has become progressively complex and recommends that governments consider when and if general damages should be available. Governments might also consider the development of an appropriate relationship between health insurance generally and general liability insurance.”

It says the medical component of claims could be dealt with directly through Medicare in order to reduce claim costs.

“Reforms which lead to an improvement in claims predictability and stability, combined with reforms which encourage injury management and rehabilitation instead of compensation, particularly for non-economic damages (pain and suffering), will be directly reflected in claims costs and ultimately in premiums,” Executive Director Alan Mason said.

Then there’s the vexed subject of taxes on insurance. It’s unlikely to be received positively by state governments which are looking at the more basic causes and effects of high premiums, and they’re not blaming themselves. The submission says a reform of insurance taxes is required as governments have made windfall gains from recent premium increases.

“For every $10 in a premium, $2 went into government coffers. State and territory governments receive $157 million in GST and stamp duty on public liability premiums,” the submission said. “ICA recommends that governments review their tax take from this source and consider ways in which reductions in premium taxes would benefit their local communities.” 

The submission also recommends:

• Protection for volunteers and for higher risk activities such as sport and adventure tourism operators, except in cases of gross negligence.
• Using law reform to change the culture from reliance on monetary compensation to quick, effective, injury management and early notification of a claim.
• Amending federal and state laws covering joint and several liability, known as “deep pocket syndrome”, where a single party may only be found 1% liable, but because other parties have no assets, the one with deep pockets (i.e. insurance) pays 100% of the claim.

“Whatever reforms are ultimately agreed on need to be applied consistently across all jurisdictions, Commonwealth, state and territory, and should be harmonised across tort, contract and statute law,” Mr Mason said.