There are many reasonably objectionable aspects of the degeneration of the New South Wales motor vehicle compulsory third party insurance scheme, the tax – compulsory levy – is too high, the return on risk and actual loss too low, and too obvious where the arbitrage flies the loot.
One aspect of the scheme permits a ‘profit’ return to the scheme-licensed insurers, on top of their claims administration fees, and premium collection commissions. That profit is guaranteed extra income out of the NSW tax dollar, for no risk to the yield.
All it takes is a few drinks, party (all) donations, lobby lunches, conferences – domestic and abroad, and suddenly a collection of Connecticut reinsurers via Bermuda are creaming the good folk of Sydney and country. They’re not paying tax, either. Sweet Victor.
The headline suggestion, that the scheme be simply remodelled to a mutual co-op, so able to conduct its business without the unfortunate political weaknesses exposed in statutory schemes’ failures.
Such a co-op will reduce premiums, assure adequate risk cover, assure transparency of business, and bring responsibility to indemnities.