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MOTOR ACCIDENT INJURIES ACT 2017 - SECT 2.25
Adjustment of premiums and Fund levies in case of excess profits or excess losses
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 or minimise 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 or minimise 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.
(2A) The Motor Accident Guidelines may
include provision for the adjustment of premiums and Fund levies under
Division 10.4 for the purposes of this clause to take into account innovations
implemented by insurers to promote the objects of this Act.
(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 or minimise excess profits, the Authority must take action
to make adjustments to avoid or minimise 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 or minimise
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
or minimise 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.
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