The NSW Government has passed the Motor Accidents Injuries Act and it will be coming into force in December 2017. The new Act will reduce costs in a number of ways. The introduction of statutory and no-fault benefits for injured people will reduce legal costs because injured people will no longer have to lodge a common law claim to get compensation for their injuries.
Common law damages will no longer be available for people with soft tissue and minor psychological injuries. This will further reduce costs and increase the proportion of benefits going to those with more serious injuries.
Another significant amendment is a lower tolerance level on “excess” insurer profits. If the average realised profits of insurers are more than 2 per cent above average filed profits, then the State Insurance Regulatory Authority (SIRA) must conduct a review to determine whether premiums should be adjusted. This is designed to ensure that insurance companies are not making excess profits, at the expense of their customers.