Proposal to transfer CGU insurance licence
October 28, 2016
The National Commission of Audit report released on 1 May made wide-ranging recommendations, some of which will impact the insurance sector.
In line with the Federal Government’s aim to increase efficiency and reduce regulation, the Commission recommended for the claims management function of Comcare (the Federal workers compensation scheme) to be outsourced and for private sector underwriting to be pursued.
The Commission believes the Government should outsource activities that are outside its core responsibilities, such as insurance underwriting.
The Insurance Council of Australia released a statement following the report welcoming the Comcare recommendations and suggested insurers could work with the government to design a privately underwritten scheme.
The Commission has also proposed for the winding up of the Natural Disaster Relief and
Recovery Arrangements (NDRRA) as it views the Federal Government’s role in disaster recovery as duplicating the states’ responsibilities.
To replace the NDRRA, the Commission has recommended a grants scheme, limited to between 25-33 per cent of the estimated reconstruction costs.
More information about the National Commission of Audit can be found here