The Tasmanian government is calling for feedback on its plans to establish a state insurer to tackle affordability challenges in home and contents, SME, farm and workers’ compensation cover.

As previously reported, Liberal Premier Jeremy Rockliff pledged to set up TasInsure in the run-up to July’s election, arguing it could save households $250 and businesses 20% on annual insurance costs.

Today the government released a discussion paper and preliminary draft legislation.

“We have outlined our proposed key outcomes and objectives for TasInsure, and we are calling on Tasmanians to have their say,” Mr Rockliff said.

“Our government is also seeking advice from a highly specialised consultant to provide advice in relation to the development, model and governance arrangements of TasInsure.”

The discussion paper says “appropriate reinsurance arrangements” may need to be proposed, and “pooling and diversification measures” must be considered.

It says policies may be rolled out in phases, “with organisations or areas where underinsurance or uninsurance presents an unacceptable risk being targeted in the first instance”.

While the document suggests the government still intends to set up TasInsure, it says the consultation will include “analysis of different policy and whole-of-system options”.

It also says the preliminary draft bill represents “an initial legislative framework” that will later be refined.

RACT today welcomed the consultation, arguing collaboration is vital to solving insurance affordability issues in the state.

“As we have said repeatedly, there is no simplistic response or solution to this complex problem and it cannot be solved by government alone,” CEO Mark Mugnaioni said.

RACT’s head of insurance Patrick Riley told insuranceNEWS.com.au the affordability issue in Tasmania is real but a government-owned insurer as the sole solution is “not the best way forward”.

“These are not the sorts of problems that are easily solved by any one participant,” he said.

“Government and industry working together is the path to getting a solution to those affordability questions.”

Mr Riley also welcomed the fact the discussion document acknowledges the importance of risk management and mitigation.

“They may well be far more economical in terms of their ability to take cost out of the system, as opposed to providing insurance coverage,” he said.

However, the paper makes no mention of state-based insurance taxes and the impact they have on insurance affordability. 

“Taxes form a significant component of insurance premiums … and that may well be part of what they want to consider,” Mr Riley said.

“What’s really refreshing here is the government is open to actually consulting on this and having the discussion. Hopefully it brings meaningful solutions.”

Feedback on the discussion paper​ and preliminary draft bill will close on January 9.