The Insurance Council of Australia has welcomed legislation introduced to the NSW parliament last week outlawing the farming of compulsory third party claims.

Claims farmers profit by selling policyholder information to law firms or other organisations.

NSW is amending its Motor Accident Injuries Act to include penalties of $55,000 for claims farming practices in the state’s CTP scheme. The latest bill builds on the Prohibition on Claim Farming Practices Act 2025, passed in April.

ICA CEO Andrew Hall says the state has shown “strong leadership to protect consumers, while locking in the long-term sustainability of the CTP scheme. No consumer should be subjected to aggressive or coercive tactics from unscrupulous operators seeking to generate insurance claims for their own benefit.”

State Insurance Regulatory Authority CEO Mandy Young said: “This new bill gives us the tools to stop unethical operators and protect the community from misleading practices.

“Claim farming undermines trust in our robust CTP scheme and causes real harm.”

ICA warns claims farming is emerging across a range of insurance lines and becoming more prevalent in motor and home cover.  

It previously raised concerns over the exclusion of CTP and workers’ compensation from claims farming crackdowns, noting Queensland’s ban on the practice covers both areas and has no time limit on prosecutions.

State Customer Service Minister Jihad Dib says claims farming is an appalling practice and “has no place in NSW”.

“These amendments will strengthen our laws and stop high-pressure tactics used by claim farming networks to prey on people through the CTP scheme,” he said. “Anyone who seeks to profit from exploiting people with an injury or their family members will face serious consequences.”