Compulsory third party (CTP) reforms aimed at streamlining the claims process, cutting fraud and reducing premiums were introduced to the NSW Parliament last week after the measures were delayed last year.

The greenslip reforms include weekly payments for up to six months after a vehicle accident, regardless of fault, while common law lump sum compensation will be retained for people with long-term and more significant injuries.

“The bill entering Parliament details reforms that are overdue and will help make the scheme more sustainable for many years to come,” Insurance Council of Australia (ICA) CEO Rob Whelan said.

The legislation was delayed last year after the legal profession campaigned against winding back access to lump sum payments.

The State Insurance Regulatory Authority (SIRA) says the system based on lump sum payments has been vulnerable to fraudulent behaviour and exaggerated claims, and defined benefits for minor injuries will reduce opportunity and incentives to abuse the system.

NSW has become the target of “claims farming”, under which unscrupulous groups try to sell claims on to law firms, according to SIRA.

Suncorp says access to lump sum payments that remains for less severe injuries may still affect premiums.

“The Government must continue its crackdown on fraudulent CTP claims to keep legal costs under control and put downward pressure on premiums,” Personal Injury Portfolio and Products EGM Chris McHugh said.

Statewide average premiums will drop to $528 from $650 under the new model, the Government says. Over the past decade greenslip prices in Sydney have risen 85%.

“The current scheme has become the least affordable in the country, and just 45 cents in every greenslip dollar is returned to injured road users,” Premier Gladys Berejiklian said.

“The rest is chewed up in scheme costs, including insurance company profits and legal fees.”

The new greenslip scheme is likely to start in December, subject to parliamentary approval.

ICA has urged the NSW Parliament to pass the legislation without amendments.