The Insurance Council of Australia (ICA) has raised “substantial” concerns about removal of the statute of limitations for civil actions relating to criminal child abuse in Victoria.

The move is a key recommendation of the State Parliament’s Betrayal of Trust report.

The government of former premier Denis Napthine committed to removing “inappropriate time limits that stop victims from accessing justice”.

It prepared an exposure draft of the Limitations of Actions Amendment (Criminal Child Abuse) Bill 2014 for public discussion.

In its response to the exposure draft, ICA acknowledges the “terrible and long-lasting effects of criminal child abuse” and the “challenges” for victims under current limitation periods, defined in the Limitation of Actions Act 1958.

ICA is pleased the new Bill will not reopen cases that have previously settled or been subject to final judgement.

“However, the Bill is drafted to apply to past, as well as future claims of abuse, regardless of whether or not past claims were previously subject to a limitation period,” it says.

CEO Rob Whelan warns “adjustments to civil liability provisions can have a significant impact on the affordability and availability of liability insurance for various organisations”.

ICA is also concerned about the impact of retrospectivity on insurance companies.

“If a limitation period is removed with retrospective effect, it can lead to a circumstance whereby a relevant insurer may be exposed to claims from a policyholder for which it has not collected any, or sufficient, premium,” Mr Whelan says.

“If a significant number of claims are made against an insurer as a result of this legislative adjustment, it could have a substantial impact on the capital position of an insurer, and this can raise challenging issues of prudential management.”

ICA expects the national Royal Commission into Institutional Responses to Child Sexual Abuse to issue a white paper early next year “on matters of civil litigation and redress”.

Mr Whelan says ICA will respond to that paper and set out its position on proposed reforms to civil liability provisions.

In the meantime, it has urged Victoria to consider the potential consequences of removing limitation provisions.

But ICA will not have an ally in the recently elected Labor Government.

New Attorney-General Martin Pakula says the Government will implement all outstanding recommendations in the Betrayal of Trust report “during the next Parliament”.