The Australian Competition and Consumer Commission will be looking for savings from the tort reforms being introduced around Australia, says new Chairman Graeme Samuel. And he has warned against better returns being “frittered away by unnecessary rises in other costs”.

Mr Samuel, who was speaking at the Insurance Council of Australia's Canberra conference last week, said questions will be asked and “more formal procedures” imposed if its monitoring of the industry’s performance detects cost savings aren’t being passed on.

The blunt message attracted the media’s attention, although it was hardly necessary, given the oft-repeated promise from the insurers that they will ensure savings are passed on.

Mr Samuel also expressed support for the plan to introduce national professional standards legislation in response to hefty rises in PI premiums. The scheme, which has attracted the attention of some industry groups like the National Insurance Brokers Association, would allow professional liability payouts to be capped.

Such schemes help to reduce the impact of “information asymmetries”, he said. “These occur because consumers tend to buy professional services infrequently, and when they do, it is hard for them to judge the quality of the service before it is bought.”