Insurers have rejected many of the NSW Government’s plans to reform the smash repair industry, particularly establishment of a licensing scheme for assessors.

Insurance Council of Australia (ICA) CEO Rob Whelan says the current system gives consumers choice while providing quality, efficient, cost-effective repairs.

He says ICA members do not believe government intervention is necessary when the industry operates under the National Motor Vehicle Insurance and Repair Industry Code.

The State Government is to establish a licensing scheme for loss adjusters, administered by NSW Fair Trading, but Mr Whelan says there is no evidence this will improve repair quality and it is likely to push up premiums.

Suncorp Personal Insurance CEO Mark Milliner is also concerned about the licensing proposal.

He told insuranceNEWS.com.au additional red tape must be avoided to ensure premiums and productivity are not affected.

But NSW Motor Traders’ Association CEO Greg Patten has welcomed the reforms, arguing they will help repairers do thorough jobs.

He says the industry review sought to relieve tensions between insurers and repairers that have been growing for years.

Mr Patten told insuranceNEWS.com.au licensing assessors is unlikely to raise the cost of insurance, because trade certificates cost $45 and last for three years.

The Government is to adopt in full or in part 18 of the 21 recommendations from last year’s repair industry inquiry, and is reviewing penalties for breaches of the industry code.

ICA fears this could lead to criminal penalties and has requested clarification.

“Seeking to apply criminal penalties is entirely disproportionate to the activities undertaken and is inconsistent with the commercial realities of the small repair and insurance industries,” Mr Whelan said.

The State Government will consult with the Federal Government on a mandatory code of conduct for the repair and motor vehicle insurance industry, enforced by the Australian Competition and Consumer Commission.

It supports penalties for practices that prevent consumers from choosing their repairer.

Mr Milliner says the inquiry showed a high level of quality in the repair industry. Suncorp welcomes the suggested national approach through the code and the commitment to crack down on unscrupulous third-party activity.

The NSW Government will also allow repairers greater access to dispute resolution provided by the Office of the Small Business Commissioner, and it supports a public register of repairers that will list breaches of the Motor Dealers and Repairers Act and regulations.

The inquiry recommended that the NSW Fair Trading Act be amended to require insurers to give insureds upfront disclosure on choice of repairer and parts when policies are purchased and renewed, and when claims are made.

But the State Government says it has limited ability on this because insurance is mostly regulated by Commonwealth laws.