May 2004 - Loophole a roadblock to falling PI costs
Professional standards legislation (PSL) is a very important step in bringing down professional indemnity costs.
New South Wales and Western Australia have led the way in developing schemes which take advantage of established self-regulation by professional bodies. Victoria, Queensland, Tasmania, and South Australia are soon to follow.
However, the Federal Government is yet to pass the Treasury Legislation Amendment (Professional Standards) Bill which will support state and territoryy PSL. The most important part of that legislation is to close a Trade Practices Act loophole, which allows legal action for personal injury and death and represents an attractive alternative to reformed state and territory systems.
In addition, the government must also pass two Trade Practices Amendments (Personal Injury & Death) bills for certainty to be returned to the cost of public liability claims.
Premium reductions experienced with the implementation of PSL have been a direct result of professionals adhering to risk management processes. However, as far as insurers are concerned, the community may well return to the "liability crisis" if those loopholes remain.
As outlined in the last AILA-NZILA News, AILA has entered into an agreement with the Australian & New Zealand Institute of Insurance & Finance and the National Insurance Brokers' Association to further promote professional standards in the insurance industry by allowing ANZIIF and NIBA members to maintain their CPD/CIP status through attending AILA events.
Following the arrangements, the AILA website required some minor amendments. While that was in progress, we decided to introduce a "new look" to the site which had not been changed since 2000.
The AILA website is a major marketing forum to inform and assist members and Friends of AILA in several areas. While AILA's primary function is convening events and conferences there are other useful tools included in the site and I recommend you add it to your "favorites" list.
For ASIC licensees and/or anyone researching specific topics, there are speakers' papers available for download to assist in compliance and links to associated websites for additional educational information.
I thank Mellon Pty Ltd for its assistance in programming and maintaining the AILA site.