NSW: Taskforce to address CTP (green slip) fraud

According to the NSW government, the state has a CTP (green slip) fraud problem, leading to significant increases in the cost of CTP. The government has announced a new Taskforce to tackle to problem.

According to the Minister for Innovation and Better Regulation Victor Dominello, the average green slip for a car in Sydney now costs more than $600, and prices had risen up to 70% since 2008, with fraud being a contributing factor and accounting for around $75 of that price increase.

“The NSW Government has identified an alarming rise in suspected fraudulent CTP claims. This is unfair and cheats all motorists who end up paying higher green slip prices,” he said.

“A dedicated fraud taskforce is being established to crack down on this issue and identify ways in which it can be prevented.”

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What is CTP Insurance?

 

What is CTP (Green Slip) fraud?

Essentially, CTP fraud is considered to be fraudulent and exaggerated claims for compensation after an accident.

The Insurance Council of Australia (ICA), which will be represented on the Taskforce, said NSW motorists were paying the price for an unprecedented explosion in CTP claims.

“SIRA’s figures show that Sydney experienced a 39 per cent surge in the number of CTP insurance claims in the seven years to 2014,” said ICA CEO Rob Whelan. “This is despite a steady fall in the number of road accidents.

“The sharpest rise was for minor injuries where the claimant uses legal representation – an increase of 124 per cent in metropolitan Sydney and 92 per cent across the state between 2008 and 2014.

“Though most claims are genuine, NSW Government evidence shows that an increasing number of claims being lodged are likely to lack merit,” he said.

Some quick NSW CTP statistics

  • Between 2008 and 2014, there was a 39 per cent rise in the number of CTP claims in the Sydney metropolitan region. This compares to a 22 per cent rise statewide.**
  • The rise in minor Class 1 claims in Sydney with legal representation soared 124 per cent over that period, and 92 per cent statewide.**
  • In contrast, there was a 12 per cent decrease in road casualties over the same period.**
  • CTP claims handling expenses have increased from $62 million in 2008 to $90 million in 2014.**
  • Insurers estimate up to 10 per cent of all insurance claims involve an element of fraud, which costs the industry more than $2 billion a year and adds about $75 to the cost of each policy.
  • The Economic Intelligence Unit believes more than 40 per cent of insurance fraud involves motor vehicle claims.

** Source: State Insurance Regulatory Authority Compulsory Third Party 2014 Scheme Performance Report.

Support for the Taskforce

Australia’s largest personal injury insurer Suncorp has welcomed the new Compulsory Third Party (CTP) Fraud Taskforce.

Suncorp Executive General Manager Statutory Portfolio Chris McHugh said alongside investigating fraudulent and exaggerated CTP claims, there is a broader opportunity to reform the scheme to deliver better value to motorists.

“The current scheme offers large lump-sum payouts for minor injuries, which encourages fraudulent and exaggerated claims that can drive up premiums,” he said.

“Establishing this taskforce is a vital first step in ensuring we work together to provide better value to those unfortunate enough to be genuinely injured on our roads.”

 

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The taskforce, chaired by the Chief Executive of the State Insurance Regulatory Authority, will make recommendations to the NSW Government on strategies to deter, detect and respond to unmeritorious and fraudulent CTP claims.

The taskforce will also develop an education awareness campaign that will inform the public on fraud being a community issue.

The taskforce will comprise of representatives from NSW Government agencies and the legal, health and insurance sectors.

Further information on the taskforce is available at www.sira.nsw.gov.au and anybody who suspects fraud can report it to the newly established CTP Fraud Hotline on 1800 600 444.

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