New South Wales Consolidated Acts

MOTOR ACCIDENT INJURIES ACT 2017 - SECT 2.25

2.25 Adjustment of premiums and Fund levies in case of excess profits or excess losses

(1) A review by the Authority of premium income of licensed insurers to determine whether premiums and Fund levies under Division 10.4 should be adjusted to avoid excess profits or excess losses--

(a) may be undertaken, with the approval of the Board of the Authority, if the average realised underwriting profits of insurers for 1 or more years are substantially greater or less than the average filed profits of insurers, and

(b) must be undertaken if the average realised profits of insurers for 1 or more years are greater than the average filed profits of insurers by 2% or more of the average filed premiums, and

(c) must be undertaken if, for at least 2 years in a row, the average realised profits of insurers are less than the average filed profits of insurers by 5% or more of the average filed premiums.

(2) The Motor Accident Guidelines may, following such a review, make special arrangements for the adjustment of premiums and Fund levies under Division 10.4 to avoid excess profits or excess losses, including an appropriate refund of premiums previously paid by policy holders or an appropriate reduction or increase in future premiums payable by policy holders.

Note : Motor Accident Guidelines with respect to insurance premium matters may only be made with the approval of the Board of the Authority--see section 10.3.

(3) If, as a result of the exercise of a function under this section, the Authority determines that premiums and Fund levies under Division 10.4 should be adjusted to avoid excess profits, the Authority must take action to make adjustments to avoid those excess profits.

(4) The Authority may, following any adjustment referred to in subsection (2) of premiums and Fund levies under Division 10.4 to avoid excess losses, direct payments from the Motor Accidents Operational Fund under that Division to insurers corresponding to any increase in Fund levies otherwise payable.

(5) The Authority must, following any adjustment referred to in subsection (2) of premiums and Fund levies under Division 10.4 to avoid excess profits, direct insurers to make payments to the Motor Accidents Operational Fund under that Division corresponding to any reduction in Fund levies otherwise payable.

(6) An amount payable to or from the Motor Accidents Operational Fund under subsection (4) or (5) is not recoverable from or payable to policy holders.

(7) The Motor Accident Guidelines may provide for an adjustment under this section to be made in relation to previous, current or future periods.

(8) It is a condition of an insurer's licence under this Act that the insurer must comply with the requirements of any special arrangement under this section.

(9) In this section--

"excess loss" means a shortfall in underwriting profit of an insurer below the filed profit of the insurer.

"excess profit" means underwriting profit of an insurer in excess of the filed profit of the insurer.

"filed premium" means a premium filed with the Authority under this Division (and not rejected by the Authority).

"filed profit" means estimated underwriting profit on which filed premiums are based.