CTP Scheme Description
Queensland operates a common law 'fault' based Compulsory Third Party (CTP) scheme, which was first introduced in 1936. The scheme provides motor vehicle owners, drivers, passengers and other insured persons with an insurance policy that covers their unlimited liability for personal injury caused by, through or in connection with the use of the insured motor vehicle in incidents to which the Motor Accident Insurance Act 1994 (MAI Act) applies.
For the injured third party, it provides access to common law rights, where the injured person has a right to approach a law court to seek monetary compensation from the person 'at fault' for the personal injury and other related losses. As a fault based scheme it requires proof of liability, meaning the injured party must be able to establish negligence against an owner or driver of a motor vehicle. Consequently, circumstances can arise where an injured person can not obtain compensation, such as when they were the driver wholly at fault in the accident because there is no negligent party against whom a claim can be made.
The Queensland scheme is governed by the MAI Act and underwritten by private licensed insurers who accept applications for insurance and manage claims on behalf of their policyholders. Compensation is paid to accident victims from the respective insurer's premium pool. Since 1994, the scheme has had an increased focus on the rehabilitation of injured persons and places certain obligations on insurers and claimants.
The Motor Accident Insurance Commission (MAIC) regulates and monitors the scheme. The Nominal Defendant determines liability for and manages claims by injured persons where the ‘at fault’ vehicle is uninsured or unidentified. It also acts as insurer of last resort if a licensed insurer becomes insolvent.
In 1999 a Committee was established to examine the fundamentals of the scheme, including the scheme’s design, affordability and role of the Government. The Committee also reviewed the scheme in accordance with National Competition Policy requirements. The CTP Review (PDF 1,020 K) was presented to the Government in November 1999.
The Recommendations of the Review Committee were introduced to the scheme with the commencement of the Motor Accident Insurance Amendment Act 2000.
A significant change to the scheme was the way in which premiums were determined. Prior to 1 October 2000, premiums were set by regulation following recommendations by MAIC to the Government, and motorists paid the same premium regardless of their insurer. However, the scheme changes adopted following the Review introduced price competition to CTP in Queensland. Since 1 October 2000, insurers have operated in a competitive market, and determine premiums within a range set by the Commission (See Premium Information).
Other amendments included changes to the claims process to facilitate the earlier reporting of claims; earlier access to funded treatment and rehabilitation for claimants; and earlier settlement of claims.
The Civil Liability Act 2003 (CLA) was introduced together with other reforms in response to difficulties experienced by the community in obtaining affordable liability insurance. Of particular relevance to the CTP scheme, the CLA introduced a new method for assessing general damages – the Injury Scale Values.
In 2010, MAIC conducted a review of the scheme’s underwriting model. While CTP premiums were affordable and compared favourably against those in other jurisdictions, the review identified limited price based competition between the licensed insurers and higher than necessary policy and acquisition costs. A key reason for this was tied arrangements between some insurers and motor vehicle dealers. Consequently, the Motor Accident Insurance Act 1994 was amended to prohibit CTP insurers from paying commissions and other inducements to intermediaries for directing CTP insurance business to the insurer. These changes delivered immediate cost savings to motor vehicle owners on implementation and provided an environment which is intended to be more conducive to price based competition between licensed insurers.
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Last reviewed 1 March 2016