One real problem in linking the insurance industry with calls for tort reform is that too many people (some of whom should know better) see the whole thing as manipulation by the industry to maximise profits. Last week Queensland Attorney-General Rod Welford was the latest to take a few swings at the industry, the Federal Government and the regulators.

Speaking at a conference in Cairns of attorneys-general called to discuss the tort law reform issue, Mr Welford called for stricter regulation of the insurance industry through the ACCC. He also called APRA “a joke” that has “been more of a lapdog than a watchdog”.

He wants the ACCC to be given powers to force the insurance industry to pass on to consumers any cost savings that are likely to come as a result of tort law reforms adopted in NSW and Queensland.

“If the states are going to significantly amend their laws to reduce the risk of liability for insurers, then we want to make sure that benefit is passed on to consumers and not just pocketed by insurance companies,” Mr Welford said. “The fact of the matter is that we need an independent regulator with the power to intervene and control unconscionable insurance contracts.”

His Victorian counterpart, Rob Hulls, pushed the same line. “Here you have a huge industry demanding that legal rights of consumers be taken away,” he said. “If we are to go down that path you have to ensure that appropriate consumer protections are put in place.”

Daryl Williams, the Federal Attorney-General, said the state politicians had been “too busy posturing” to notice that the General Insurance Reform Act,  “the most significant reforms to the prudential supervision of general insurance in decades”, came into effect on July 1.

Mr Williams said a recent report by Moody’s found the new supervisory regime put Australia way ahead of insurance reforms in other countries like Britain. And he also pointed out the ACCC already has a monitoring role for the insurance industry, and that the states and territories are hardly innocents.

“My state and territory counterparts conveniently fail to acknowledge that the compensation claims that are putting pressure on the insurance system are made under state and territory laws,” he said.

Mr Williams says all states and territories need to bring in tort law reforms. “I call on them to show the community that they are taking this issue seriously and work together to produce a consistent and co-ordinated response to the issue of tort law reform.”