The Insurance Council of Australia (ICA) has supported reforms aiming to increase the efficiency and affordability of the NSW compulsory third-party (CTP) insurance scheme.

The NSW Government plans to introduce a no-fault payment system and change benefit rules, Finance and Services Minister Greg Pearce says.

Only people with more than 10% whole-person impairment would continue to have access to lump-sum payments through the courts, according to proposed legislation.

An ICA submission supports a proposal that only common-law lump sums would be affected by degree of fault.

The council also proposes a range of measures to reduce costs and improve affordability of the insurance scheme, known as the greenslip system.

NSW greenslip prices have risen about 70% since 2008 and affordability is worse than in other states and territories, according to a government discussion paper released earlier this year.

Greenslips are sold by five competing insurance companies operating seven CTP licences or brands.

ICA’s proposals include ensuring transparency for legal costs and competition levels.

It calls for a better understanding of the range of returns on capital required to deliver fair, but not excessive, profits to CTP insurers.

Other proposals include a more efficient issue of policies, a greater allowance for full-risk pricing and the reduction of cross-subsidies, unless absolutely necessary for affordability.