RACQ Insurance has announced its decision to withdraw from the Queensland compulsory third-party (CTP) scheme starting in October. The company cited concerns that the ongoing scheme review will not result in a fair and equitable environment for all participants.
Approval from the Motor Accident Insurance Commission (MAIC), the governing body of the scheme, is still pending for the decision. Other insurers, such as Suncorp, Allianz, and QBE, also offer CTP coverage in Queensland.
RACQ Insurance has been advocating for the implementation of “premium equalisation” within the scheme to the Queensland Government. This is due to the current arrangements where insurers cannot selectively underwrite risks or decline coverage to a motorist who chooses them.
The insurance company has presented the case that it faces a disadvantageous portfolio, characterized by a higher proportion of older vehicles, young or inexperienced drivers, shorter policy terms, and re-registered vehicles in comparison to other insurers.
Group CEO David Carter expressed that despite continuously raising concerns with the State Government and MAIC over the past few years, it has become evident that even the most recent scheme review is unlikely to bring about a fair and equitable environment or restore fairness among insurers.
Regrettably, despite the extensive efforts we have made over numerous years to enhance our position, including the support received from our reinsurance partners, it is no longer feasible for us to sustain our involvement in the scheme.
MAIC has acknowledged that RACQ Insurance’s choice to withdraw from the scheme is a commercial decision, and it is currently evaluating the request.
According to RACQ, the reassignment of existing CTP insurance policies will occur from the subsequent registration renewal date following the withdrawal, ensuring no impact on motorists or premium prices.
“If RACQ’s withdrawal receives approval, we will engage in consultations with insurers and the Australian Prudential Regulatory Authority regarding this matter.”
MAIC has announced its commitment to collaborate with RACQ Insurance and the Department of Transport and Main Roads to ensure a seamless transition process.
Mr. Carter assures that the CTP change has no impact on the insurer’s other products or its dedication to offering motor and home insurance to Queenslanders both presently and in the future.
Source : insurancenews.com.au
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