Lawyers have questioned the need for a state-owned general insurer in Tasmania and warn any model should be kept separate from the compulsory third party scheme for motor accidents.

A government discussion paper released last year suggests leveraging the Motor Accidents Insurance Board model and structure for TasInsure, with the degree of integration to be considered in consultations.

The Australian Lawyers Alliance’s Tasmanian branch says the CTP scheme is effective and well run, and provides broad benefits to the state.

It warns the MAIB is not the right entity to run a broader insurer.

“Its services and its capital pool are too valuable to the state to risk on a venture like this,” the group’s submission says.

“If TasInsure is to proceed, it should be a completely separate entity from the MAIB on a legislative institutional, administrative and financial level.” 

The alliance questions the need for the scheme given the “quite competitive” market in Tasmania, including major national insurers and the locally based RACT.

“The intention to reduce insurance costs is admirable, but unless approached with care, it creates risks to both the insurer and the insured.

“Care should be taken not to simply create an insurer of last resort.”

Premier Jeremy Rockliff, facing his second election in less than two years, last July promised to launch TasInsure to lower premiums.

The government discussion paper says premiums are rising due to national and international risk profiles that in many cases do not reflect local exposures – leading to disproportionately high prices.

“This conclusion, or assumption, should be treated with care,” the lawyers’ submission says. “Detailed research should be undertaken (or, if it has been undertaken, presented) to support this argument.”

The submission is available here.