A review of the ACT compulsory third party motor insurance scheme will consider if it is improving outcomes for injured people.

Submissions to the review of the Motor Accident Injuries Act close on September 18. The territory’s CTP insurers are NRMA Insurance and Suncorp-owned AAMI, APIA and GIO.

The review discussion paper says the ACT government is establishing a way to assess insurers’ actual profitability under the scheme, “recognising that privately underwritten insurers bear risk and should earn a reasonable return”.

Regulation for a “profit mechanism” to prescribe how insurer profitability is assessed is expected to be implemented this financial year.

The scheme, launched in February 2020, provides defined benefits on a no-fault basis for up to five years, but allows access to common law for serious at-fault injuries.

The discussion paper says insurers and injured people have sought greater clarity on procedures around claims management, and detailed guidelines could improve this.

There are questions around income replacement benefits and eligibility for benefits, about dispute resolution, and how to improve the application process.

Late applications, more than 13 weeks after an accident, continue to occur because injured people are unaware of the scheme.

A report by actuary Finity into the scheme’s financial performance has found premiums have been stable over the six years and affordability has improved from about 30% of average weekly earnings to 22% due to price competition between insurers.

The average passenger vehicle premium at June 30 last year was $402.43.

Find out more here.