Motor insurers’ profits and costs are to be looked at as the part of a NSW Government review of compulsory third party (CTP) pricing.

The NSW Motor Accidents Authority (MAA) will carry out the CTP Pricing Strategy Review, which Finance and Services Minister Greg Pearce says will look at issues surrounding the viability of the Green Slip scheme.

“The strategy will determine the future direction of the scheme and address current issues and areas for improvement, including insurer profits and costs,” he said.

“It will also look at the transparency of legal costs to ensure injured parties are fairly treated in terms of entitlements as well as equitable and affordable CTP pricing.”

Areas of CTP to come under scrutiny will be market design, premium regulation, government expenditure, benefits design and claims management processes.

The terms of reference for the review state the aim is to lower CTP premiums by improving regulations covering how much insurers charge.

Insurers will be expected to make an “equitable but not excessive profit margin, supported by appropriate reserving practices” in the CTP market.

The review will also look at improving the prudential supervision of insurers and market acquisition practices “to ensure that premiums are sufficient but not excessive”.

The MAA also wants to see better price competition in the CTP market.

Mr Pearce says the MAA will talk to insurers, actuaries, health and legal professionals to gain a better understanding of the issues and potential solutions.