Scheme reforms in 2019
On 5 December 2019, new legislation commenced which aims to stop the practice of insurance car crash scamming (commonly known in the insurance industry as ‘claim farming’). It is now illegal in Queensland for lawyers to pay a fee to a car crash scammer.
Car crash scammers contact unsuspecting people via phone, email or social media and then pressure them (or their family members) to make a CTP insurance claim. These calls may originate from overseas or local call centres. Often, the call is disguised in such a way that it appears to be coming from a local or legitimate number, to increase the likelihood of the call being answered. These scammers sometimes even pretend that they represent MAIC, an insurance company or another government organisation. They trick people into sharing their personal information, which they sell onto law firms for a profit. Car crash scammers have been known to use aggressive tactics and target vulnerable Queenslanders. Severe penalties for car crash scamming have been introduced, including fines as high as $40,035.
Scheme reforms in 2010
In 2010, MAIC conducted a review of the scheme’s underwriting model. While CTP insurance premiums were affordable and compared favourably against those in other jurisdictions, the review identified limited price-based competition between the licensed insurers and higher-than-necessary policy and acquisition costs. A key reason for this was tied arrangements between some insurers and motor vehicle dealers. Consequently, the Motor Accident Insurance Act 1994 was amended to prohibit CTP insurers from paying commissions and other inducements to intermediaries for directing CTP insurance business to the insurer. These changes delivered immediate cost savings to motor vehicle owners and created an environment which is more conducive to encouraging price-based competition between licensed CTP insurers.
Scheme reforms in 2000
In 1999, a committee was established to examine the fundamentals of the scheme, including the scheme’s design, affordability and the role of the government. The committee also reviewed the scheme in accordance with National Competition Policy requirements. The CTP Review was presented to the government in November 1999.
The recommendations of the review committee were incorporated into the scheme with the commencement of the Motor Accident Insurance Amendment Act 2000.
A significant change to the scheme was the way in which premiums were determined. Before 1 October 2000, premiums were set by regulation following recommendations by MAIC to the government, and motorists paid the same premium regardless of their insurer. However, the scheme changes adopted following the review introduced price competition to CTP insurance in Queensland. Since 1 October 2000, insurers have operated in a competitive market and determined premiums within a range set by MAIC.
Other amendments included changes to the claims process to facilitate the earlier reporting of claims, earlier access to funded treatment and rehabilitation for claimants and earlier settlement of claims.
The Civil Liability Act 2003 (CLA) was introduced together with other reforms in response to difficulties experienced by the community in obtaining affordable liability insurance. Of particular relevance to the CTP insurance scheme, the CLA introduced a new method for assessing general damages, through injury scale values.