The National Insurance Brokers Association (NIBA) has told the Federal Government’s Competition Policy Review that “ongoing government monopolies” remain in the insurance industry.

It says that “despite sound examples of effective private sector markets… substantial areas of insurance” are still provided by governments “with little or no opportunity for the benefits of competition to flow back to businesses or the community”.

NIBA argues this is in contravention of National Competition Policy.

Its submission singles out state-run workers’ compensation schemes in Queensland, NSW, Victoria and SA. 

“The underwriting… is not delivered in a manner conducive to competition. Those jurisdictions do not have the benefits of competitive pressure for the underwriting and management of workers’ compensation insurance that exists in WA, Tasmania, NT and the ACT.” 

NIBA says the schemes would be unlikely to satisfy prudential requirements imposed on private sector underwriters, and argues the principles of “competitive neutrality” should apply to government agencies providing insurance.

It calls for “National Competition Policy-type reviews” of public sector workers’ compensation schemes “to ensure the full benefits of competitive pressure can be realised”.

The Insurance Council of Australia, QBE and Suncorp have also called for an end to governments underwriting statutory insurance such as workers’ compensation and compulsory third party.

The review panel received 236 submissions. It is scheduled to produce a draft report in September, after which further written submissions will be called for.