REGULATORY IMPACT STATEMENT

Road Transport (Third-Party Insurance) Regulation 2008

Prescription of Information Collection Requirements

SL2008-37

Department of Treasury

20 August 2008

Table of Contents

1.	Authorising law

2.	Policy objectives of proposed law

3.	Appropriateness of approach adopted

4.	Consistency with authorising law

5.	Inconsistency with other ACT laws

6.	Consideration of alternative approaches

7.	Benefits and costs of proposed law

8.	Consistency with scrutiny committee principles

Introduction

This Regulatory Impact Statement (RIS) relates to the introduction of requirements for licensed insurers to provide information to the CTP regulator under Part 8 (sections 32-35) of the Road Transport (Third-Party Insurance) Regulation 2008. These provide that licensed insurers must give the CTP regulator monthly and quarterly returns about CTP claims, together with other information relevant to the administration of the Road Transport (Third-Party Insurance) Act 2008. Establishment of the requirements to provide information to the CTP regulator satisfies the ‘appreciable cost’ criteria of Section 34 (1) of the Legislation Act 2001, which determines whether or not a subordinate law requires a RIS.

1.	Authorising law

The authorising law for the Road Transport (Third-Party Insurance) Regulation 2008 (the Regulation) is the Road Transport (Third-Party Insurance) Act 2008, section 277. 

2.	Policy objectives of proposed law

The objective of the Regulation (part 8, section 32-35) is to enable the CTP regulator to monitor the performance of licensed insurers under the ACT CTP scheme. 

3.	Appropriateness of approach adopted

Part 8, sections 32-35 of the Regulation stipulates that licensed insurers must provide the CTP regulator:
(i)	with information about the progress of CTP claims on a monthly basis (section 32);
(ii)	with information about the costs incurred and recoveries made by the insurer in relation to CTP claims on a quarterly basis; and
(iii)	with copies of returns provided under the Corporations Act or the Insurance Act 1973 (Cwlth), copies of requests for information or explanation from the Australian Prudential Regulatory Authority (APRA) and of responses to APRA, actuarial reports on the insurer’s financial position requested by the CTP regulator, and with details of transactions affecting the control of the insurer and of changes to the management of the insurer’s CTP business.

These reporting requirements are the same as those that apply to CTP insurers operating in Queensland and are also broadly similar to the requirements in NSW.  They are intended to enable the CTP regulator to monitor the effectiveness, efficiency and financial viability of a CTP insurer’s CTP insurance business.

4.	
Consistency with authorising law

The prescription of requirements for licensed insurers to provide information to the CTP regulator is consistent with the objects of the authorising law. One of the principal objectives of the authorising law is to increase the efficiency with which claims are processed by insurers. 

5.	Inconsistency with other ACT laws

Part 8, sections 32-35 are not inconsistent with other ACT laws.

6.	Consideration of alternative approaches

There are no relevant alternative approaches. The prescription of information requirements is a core element of insurance regulation of this type and is considered appropriate given the nature of the risks associated with this area.  Therefore it would not be appropriate for there to be a voluntary approach to information provision by licensed insurers.

7.	Benefits and costs of proposed law

The information that Part 8, sections 32-35 requires licensed insurers to provide to the CTP regulator is data necessary to enable the CTP regulator to oversee the operation of the market for CTP in the ACT. By ensuring consistent information/reporting requirements it will facilitate reduced entry costs for new CTP insurers entering the market. It will also enable insurers to monitor their claims position and market share in real time.

Although the costs to licensed insurers of providing returns to the CTP regulator on a monthly or quarterly basis may appear to be significant, there will be little or no additional cost to any of the six insurers already operating in Queensland. This is because the information provisions requirements are the same as in Queensland and the companies in question already have the necessary software. All CTP insurers operating in Queensland (other than RACQ, the state motoring association) also operate in NSW. The Queensland system is a more modern CTP platform than NSW; however, the regulators in both states require the same information as will the ACT.

8.	Consistency with scrutiny committee principles

Part 8, sections 32-35 are consistent with the scrutiny committee principles.  The sections: 
•	are consistent with the objectives of the Road Transport (Third-Party Insurance) Act 2008; 
•	do not unduly trespass on existing rights established by law; 
•	do not contain make rights, liberties and/or obligations unduly dependent on non-reviewable decisions; and
•	do not contain matters that should properly be dealt with in an Act. 

In addition to these sections of the Regulation, the Regulation as a whole is consistent with the Scrutiny Principles.