Insurers are getting tough with legislators as state governments drag their heels on tort law reform. Tax reform also came on the agenda yesterday when the Insurance Council made a submission to a Senate inquiry investigating public liability and professional indemnity issues.

ICA President Raymond Jones warned that crippling losses experienced by insurers in PL and PI classes have reached a point where the insurers could be forced to withdraw from the market if something isn’t done.

Mr Jones said that in the three years to the end of 2000, insurers lost $1.8 billion on PL and $675 million on PI.

In a note of encouragement for industry sectors battling to have state government imposts on insurance premiums lowered, the Institute of Chartered Acountants has called for “unconscionable” tax levels to be examined.

As professional groups begin to come forward with horror stories of premium increases and lack of availability, the entire issue of liability and law reform is being brought into sharper focus.

The Australian Financial Review reported today that the Australian Council of Professions has joined the attack on tax levels for premiums. Policy consultant David Stephens said government inaction on the issue has “long since passed from the realm of tardiness into that of failure of will”.

Ironically, the ICA warning came as SA Treasurer Kevin Foley announced to Parliament that legislation to cap public liability claims will be part of a package to be introduced in a special sitting on August 13. The reform proposals are generally in line with Victoria’s.