Insurance idea opposed

Press, 27 July 1988, Page 4

Insurance idea opposed

PA Wellington While a compulsory third party insurance scheme might lead to a “financial bonanza” for insurance companies, the insurance industry does not support the idea, a select committee was told yesterday.

The executive director of the Insurance Council, Mr Trevor Roberts, told Parliament’s Communications and Road Safety Select Committee that a compulsory scheme would increase the cost of insurance to an unacceptable degree.

While the insurance industry also had some sympathy for the view that the worst drivers should be kept off the road, and that one way to do it would be by

refusing to insure them under the compulsory scheme, that was not the industry’s role. “We think that has the overwhelming social objection that it puts the insurance industry virtually in the position of licensing drivers,” he said. In response to questions from the committee, Mr Roberts said about 15 per cent of vehicles on the road were uninsured. That was “a hell of a lot” and twice the number of uninsured vehicles were driven five years ago. The insurance industry estimated that if a compulsory insurance scheme were introduced, premiums would rise 20 per cent.