Queensland compulsory third party (CTP) reforms should target prevention of fraudulent and exaggerated claims, the Insurance Council of Australia (ICA) says.

It urges the Motor Accident Insurance Commission to avert a repeat of the recent rise in fraud experienced in NSW.

“The Queensland CTP claims experience has been described as stable and benign,” ICA says in a scheme review submission.

“Nonetheless, there is emerging evidence of an increased frequency in low-severity, legally represented claims. The experience in NSW demonstrates the number of these types of claims can quickly and sharply increase.”

ICA recommendations include creating a taskforce comprising regulators, police, legal and medical associations, and insurance representatives to tackle fraud, following a similar move in NSW.

A report from the NSW State Insurance Regulatory Authority says there is evidence “claims farming firms” from the UK are starting to operate in Australia, with NSW the epicentre.

“It is possible proposed reforms in NSW may create a need for certain service providers to move their business focus to Queensland,” ICA says.

“The adoption of an early and holistic fraud strategy may limit their impact.”

ICA says Queensland should use data analytics to decipher trends, run a public awareness campaign and introduce measures to reduce the financial incentive for making small, unmeritorious claims.

The Motor Accident Insurance Commission says Queensland premiums are among the most affordable in Australia, but it has been six years since the last review of the state scheme and it is time to examine potential improvements.

The CTP review committee is due to present its final report to the Government by December 9, with changes expected to take effect from next July 1 or as soon as practical for next year’s premium-setting process.

Allianz, QBE, RACQ Insurance and Suncorp underwrite the scheme.