The Insurance Commission of WA says insurers’ submissions on a proposed no-fault compulsory third party (CTP) scheme for the state could be self-serving.

The state published a green paper in October seeking submissions on three options: no change; a no-fault scheme for all people catastrophically injured; and a no-fault scheme just for those not currently covered.

Under the third option victims able to prove another driver’s negligence would still be eligible to claim a lump sum.

The Insurance Council of Australia (ICA) and insurers including IAG and QBE have backed the second option, saying it is more consistent and fair.

But Commission Secretary Kane Blackman told insuranceNEWS.com.au the submissions are “aligned with insurers’ financial interests”.

He believes private insurers intend to take over the WA CTP market but want the Government to continue handling all highly expensive catastrophic claims.

Option two would make this easier to achieve, Mr Blackman says.

“It would strip away all the high-cost claims – pretty nice work if you can get it.”

About 92 people are catastrophically injured in crashes in WA each year, and about 44 receive no compensation because they cannot assert fault against another driver.

Mr Blackman says privatising the CTP market would result in higher premiums for customers, because insurers will have profit margins to maintain, plus higher costs and higher capital adequacy requirements.

ICA told insuranceNEWS.com.au it has not specifically advocated privatisation in the WA system, but has “made strong submissions in favour of competitive underwriting for all government monopoly schemes”.

However, it says this did not influence its green paper submission.

“ICA’s support for option two is simply as stated in our submission,” a spokesman said. “ICA supports this option because it is consistent with the NSW Lifetime Care and Support Scheme and other jurisdictions such as the ACT and SA, and is simpler and fairer than option three.”