No-fault lifetime-care compulsory third party (CTP) cover, one of two schemes under consideration by the Queensland Government, is more effective in protecting people injured in road accidents, according to insurers.

Insurance Council of Australia CEO Rob Whelan says the hybrid common-law and no-fault arrangement – the other model being considered – could “create inconsistencies in the level of care and support those catastrophically injured may receive”.

“We consider that such a scheme would not meet principles of simplicity, consistency and fairness,” he says.

The state’s current CTP scheme does not provide cover for injured people who are at fault, or in cases where there is no negligent party.

It hopes to rectify this under the proposed National Injury Insurance Scheme (NIIS), and aims to have protection in place by July 1.

Mr Whelan says Queensland should structure its CTP cover on the NSW model, which has the Lifetime Care and Support Scheme (LTCS), under which non-catastrophic injuries are underwritten by general insurers through third-party arrangements.

“In particular, close alignment between NSW and Queensland will prevent the complications that arise from cross-border inconsistencies,” he says. “Consistency between the two schemes will provide greater certainty for insurers and motorists who operate across both these states.”

The model is funded by a levy on motorists when they buy greenslip policies.

The country’s biggest insurers – IAG, Suncorp and QBE – also favour copying the NSW model.

“This model is also suitable because there will be alignment with statutory schemes operating in similar jurisdictions around Australia, including the [NSW] Lifetime Care and Support Scheme, the ACT model and the model being introduced in SA from July 1,” QBE says.

“In addition, the alternative model... a hybrid common-law and no-fault care and support arrangement, would give rise to a number of significant issues.

“Most significantly, there is potential to create inconsistencies in the level of support and compensation received by those affected by catastrophic injury in a motor accident.”

With July 1 looming, Suncorp EGM Statutory Portfolio & Underwriting Management Commercial Insurance Chris McHugh says it is important the Queensland Government works quickly on a transition, because many issues must be ironed out, including calculation of premiums.

“We urge the Queensland Government to confirm the design and implementation arrangements for the NIIS as soon as possible, to ensure a smooth transition to a no-fault scheme,” he said.