Insurance for priests could be a “very useful development”, Cardinal George Pell told the royal commission on child sexual abuse last week.

Dr Pell was responding to a suggestion from commission head Justice Peter McClellan that the clergy should take out cover in the same way other professions are required to.

However, he says Catholic Church Insurance (CCI) has so far refused to indemnify priests for claims related to sexual abuse and there is a question as to whether the church can insure against criminal conduct.

The church pays for reparations but the Sydney Archdiocese does not pay legal defences for any priest accused of sexual abuse, Dr Pell says.

CCI declined to comment, pending the outcome of the royal commission.

Dr Pell says he has been concerned the Australian church could face similar abuse claims to those that have bankrupted several dioceses in North America.

He told the royal commission the Federal Government should set up an independent body to assess what damages should be paid to abuse victims. And the Catholic Church could establish a corporate structure that allows officials to be sued for offences.

Dr Pell says the church has the same rights as an Australian citizen, and should be treated like a citizen or community group such as the Scouts in any legal proceedings.

CCI’s annual report for last year says outcomes of the royal commission and other sexual abuse inquiries in Victoria and NSW “have not been determined, and for that reason the ultimate financial impact on CCI is not known at this stage”.