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Pressure on industry to justify hikes
Andrew White
05feb02
The Australian
PRESSURE mounted on the insurance industry yesterday to explain steep rises in public liability premiums as the federal and state governments battled over solutions to the crisis.

Queensland Premier Peter Beattie and the Australian Industry Group joined calls for a clearer explanation of premium rises ahead of a federal government-hosted ministerial meeting on public liability insurance.
Mr Beattie welcomed the offer by federal Assistant Treasurer Helen Coonan to host a national forum, but said he was concerned that the industry was using the September 11 terrorist attacks "as a vehicle to put insurance premiums through the roof".
He understood there needed to be some increases but he was alarmed at the rises "of a couple of hundred per cent in premiums".
"The insurance industry needs to justify the proposed increases because it's causing a lot of grief and a lot of harm to a lot of people and justify why the risk, in their view, has increased to that extent. I find some of it hard to believe," Mr Beattie said.
Heather Ridout, deputy chief executive of the AiG, which represents manufacturers, said businesses were concerned they were facing huge increases in premiums despite having no history of claims.
"Like my members, if the insurance companies want to increase prices by an extraordinary amount, they have got to justify it, they have got to show cause," Ms Ridout said.
AiG plans to survey its 10,000 members on their experience of premium increases and their claims history to provide data that can be fed to the federal and state governments before the meeting, expected to be next month.
Senator Coonan has offered to set up a forum on public liability to develop a national response to rising claims and premiums that she says are threatening the Australian way of life.
Victorian Finance Minister Lynne Kosky said the forum should examine pooling arrangements for community groups and businesses to buy insurance; codes of practice for risk management; and long-term regulation of the industry to ensure competitive premiums.
But NSW Premier Bob Carr said the forum would be a waste of time unless the federal Government put a firm proposal on the table.
"It can't become a paper-shuffling exercise where different states put forward different propositions and we set up a working group," Mr Carr said.
"If it becomes an exercise where the states go there and put forward a range of proposals and nothing's agreed, we are wasting everyone's time and this crippling increase in insurance rates is going to go on."
But Senator Coonan said reform of public liability was a state issue. The federal Government had no role in initiating reforms but could help the states to find a nationally consistent solution.
"Playing the blame game won't assist in finding a solution for the many community groups and small businesses who have been hard hit by rising premiums," she said.
"The commonwealth has made an offer in good faith to assist the states to share information and reach a common approach, and Bob Carr is simply trying to direct attention from his own inaction on this matter."

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