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SIRA completes early stages of CTP insurer profit assessment

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NSW’s State Insurance Regulatory Authority (SIRA) says it has finished a preliminary review into its evaluation of whether CTP insurer profits should be recouped and returned to NSW drivers.

The state regulator says actuaries are now reviewing profits earned by each individual CTP insurer on the sale of Green Slips from 2018, 2019, and 2020.

Under CTP reforms introduced in 2017, SIRA has the power to claw back insurer profits above 10% as part of the transitional excess profits and losses (TEPL) mechanism.

Last year, SIRA activated the mechanism for the first time as it recouped approximately $91 million in insurer profits that were distributed back to NSW motorists through savings on Green Slips.

SIRA says the assessment will consider the costs of future insurer claims before recouping profits.

Insurers can apply to retain 3% of profits for each accident year if said profits are used to invest in measures proven to have motorist benefits, and the state regulator says it has provided preliminary approval for five applications.

SIRA says it will announce the completion of its assessment before the end of the year.