The Insurance Council of Australia (ICA) says a hybrid no-fault compulsory third party (CTP) scheme is the way forward for NSW, which is looking to reform the system.

CEO Rob Whelan says ICA’s submission to the NSW Government on the issue acknowledges the concerning trends in the current scheme and “we recognise that further meaningful change to the NSW CTP scheme is now due”.

The submission says the hybrid no-fault scheme has been analysed by Finity Consulting against the four objectives that the Government wants to achieve as part of the overhaul.

“The analysis represents industry’s preferred model for scheme reform,” Mr Whelan said.

The hybrid scheme’s main features include providing defined statutory benefits for anyone injured in a motor vehicle accident, regardless of fault, with the retention of common law benefits for the most seriously injured.

Better Regulation Minister Victor Dominello has said the current scheme is “inefficient and unsustainable” and the Government has put up four alternative options to replace the existing model.

It wants the overhaul to achieve four objectives:

• Raise the proportion of benefits provided to the most seriously injured road users;
• Reduce the time it takes to resolve a claim;
• Reduce claims fraud and exaggeration opportunities; and
• Cut the cost of green slip premiums.

According to the options paper, only 45 cents for every premium dollar paid went to injured road users, with 55 cents absorbed by scheme costs and provider fees.

The current NSW CTP scheme operates on a common law fault-based basis.

Public consultation for the proposed reforms closed in April and the Government is expected to announce its response in the second half of this year.