The NSW Government has supported the insurance industry by disagreeing with many of the findings of a Legislative Council committee report on personal injury compensation legislation.

The Government says tort reforms should not be reversed because any changes could increase insurance premiums by nearly a third.

“If the recommendations contained in the committee’s report were adopted, independent actuaries PricewaterhouseCoopers estimate it would lead to the annual cost of premium as a percentage of wages increasing to at least 3.59% and as high as 4.6%,” the Government’s response to the report said.

The report and the Government’s response were released late on Friday, just before the three-day holiday weekend – a timing usually reserved for information governments want to bury.

While the report pushes for negligence reforms to be unwound, the Government has basically rejected the majority of the 26 recommendations, saying they would “destabilise the balance between the rights to injured people to compensation and the ability of the community to pay”.

It rejected a recommendation for consistent personal injury damages across compensation schemes on the grounds that standardisation would cause important features of each fundamentally distinct and unique personal injury compensation scheme to be undermined or even lost.

Insurance Council of Australia (ICA) Deputy CEO Dallas Booth says consumers have benefitted from lower premiums for motor accident and civil liability cover in recent years, while retaining access to proper compensation in the case of injury.

“This has been a direct result of Government reforms to personal injury damages insurance,” he said. “The Government’s support of the current schemes reflects the fact that the reforms are working.”

ICA says tangible benefits delivered by the reforms to motor accident compensation, workers’ compensation and civil liability have included fairer, faster motor accident compensation, accompanied by an average fall of $100 in the price of green slips and more affordable and available public liability insurance.

“Assertions by the legal profession that there have been few or no reductions in premiums are simply wrong,” Mr Booth said. “It is also ludicrous to suggest that insurers are making ‘bumper profits’ from public liability insurance.”

The most recent industry information from the Australian Prudential Regulation Authority shows that during the 2004/05 financial year, public liability insurers collected $2.12 billion in gross premium and made provisions for claims of $2.09 billion.