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Insurers want action over CTP ‘claims farmers’

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Insurers involved with Queensland’s compulsory third party (CTP) scheme have again pushed for deeper reforms to fix the widespread problem of “claim farming” plaguing the system.

Claim farming involves cold calls to individuals asking if they have been involved in an accident and making promises of quick and easy compensation. The callers often use high-pressure tactics to extract personal details that are then sold to lawyers or other interested third parties.

The state’s proposals to control the problem, including criminalising the act, do not go far enough, Suncorp and RACQ Insurance representatives told the Parliamentary Economics and Governance Committee in Brisbane last week.

Legislative changes introduced in State Parliament last month also called for an expansion of the enforcement and special investigation powers of the Motor Accident Insurance Commission, the scheme regulator.

But insurers believe the claim farming issue could be eliminated through the introduction of a no-fault CTP scheme for Queensland.

“The best way to disrupt claim farming is to remove the financial incentive provided by a lump sum payment model [and replace it with] a no-fault, defined benefit CTP scheme,” Suncorp spokesman Dan Wilkinson said.

“Under a no-fault, defined benefits scheme, the focus is on rehabilitation, not compensation, while providing care, treatment and lost income as required, rather than a single payment at the end of a claim which could be years after an accident.

“It would also mean greater protection for the estimated 40% of people injured in a motor vehicle accident that currently get nothing.

“The ability for lawyers to take 50% of a lump sum claim settlement as fees provides the strong financial incentive to maintain claim farming,” Mr Wilkinson said.

RACQ Insurance says Queenslanders deserve a CTP scheme that protects them from criminals and unscrupulous lawyers.

“CTP is there for those who are truly injured, and we need to make sure it isn’t overtaken by these sort of dodgy claims,” spokesman Paul Turner said.

The committee expects to table its report by August 9.