Insurers have welcomed proposed changes to NSW’s costly compulsory third party (CTP) scheme.

The Motor Accidents Authority (MAA), which oversees the current fault-based scheme, is seeking a stronger role with powers to set guidelines and act against insurers that fail to comply.

It has also reviewed CTP pricing and wants to introduce lower premiums through regulation “that results in an equitable, but not excessive, profit margin for insurers”.

The current scheme has been criticised for its growing number of claims and lengthy disputes over who is at fault, which have driven increases in green slip premiums, according to the MAA.

Suncorp Commercial EGM Statutory Portfolio Chris McHugh says a no-fault scheme will be more affordable for motorists and deliver better outcomes to injured people.

“The current scheme has significant ‘friction’ costs that reduce efficiency and delay the resolution of claims,” he told insuranceNEWS.com.au.

“The proposed ‘first party’ element is positive because it means policyholders and those travelling in the policyholder’s vehicle will be cared for by their own insurer, rather than the insurer of the at-fault driver.”

The current scheme is due for an overhaul, according to NRMA Insurance.

“The NSW CTP scheme is 13 years old and we support reform and welcome any changes that make it easy for injured people to return to health while making CTP affordable,” a spokesman said.

The Insurance Council of Australia says it “supports the NSW Government’s CTP scheme reform process, and its goals of addressing scheme affordability and sustainability”.

The scheme’s final form is a matter for the State Government, it says. “The industry looks forward to working with the Government on the details of the proposed reforms.”