A NATIONAL package to tackle the crisis in professional indemnity insurance has been welcomed by a range of professional groups.
State and Federal government ministers endorsed the package last week, following months of lobbying over the spiralling cost and reduced availability of professional indemnity insurance.
The three-pronged national package draws upon some changes already implemented or underway in Western Australia.
The package includes a commitment from all jurisdictions to introduce professional standards legislation (PSL) in line with the current New South Wales and WA legislation.
The WA Government had agreed to modify its existing legislation to align it with the NSW legislation.
State and Federal ministers also endorsed a national model for proportionate liability, which would reduce the level of financial risk facing professionals.
The WA Government introduced legislation earlier this year to introduce proportionate liability.
The Federal Government also reaffirmed its commitment to amend the Trade Practices Act and section 54 of the Insurance Contracts Act to support the legislation.
Institute of Chartered Accountants of Australia CEO Stephen Harrison said it was a “big win for the Australian public that all levels of Government have tackled the PI crisis head on”.
He said the ICAA would look to a meeting on August 29 for the Prime Minister and the Premiers to agree on legislative priority at both the Federal and State levels.
Professions Australia policy consultant David Stephens said the package was “a very significant achievement”.
“The three planks are exactly what we have been arguing for for the past 15 months.”
“We are now looking for legislation that will put that commitment into black letter law.”
Mr Stephens said prompt legislative action would encourage a positive response from the international insurance industry.
Minister for Revenue and Assistant Treasurer Helen Coonan said the reforms were a significant step towards introducing greater certainty in the professional indemnity market.
“The Federal Government is firmly committed to initiatives to improve the affordability and availability of professional indemnity insurance,” she said.
“We will be moving quickly to introduce amendments to the Trade Practices Act and other legislation to support both proportionate liability and professional standards legislation.”
Senator Coonan said changes already implemented such as tort law reform, were starting to have an impact on the insurance landscape.
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.