New South Wales Consolidated Acts New South Wales Consolidated Acts(cf s 15B MAA)
(1) The Authority may only reject an insurance premium filed with it under this Part if it is of the opinion that--(a) the premium will not fully fund the present and likely future liability under this Act of the licensed insurer concerned, or(b) the premium is, having regard to actuarial advice and to other relevant financial information available to the Authority, excessive, or(c) the premium does not conform to Motor Accidents Premiums Determination Guidelines in force under this Part, or(d) the premium has been determined in a manner that contravenes section 30 (Maximum commission payable to insurers' agents).
(2) Written notice of the Authority's rejection of a premium, and the reasons for the rejection, must be given to the licensed insurer.
(3) If the Authority rejects a premium of a licensed insurer, the licensed insurer may request the Authority to reconsider the rejection.
(4) Pending its reconsideration, the Authority may request an actuary to determine a provisional premium.
(5) A provisional premium so determined has effect, pending the Authority's reconsideration, as if it were an insurance premium which may lawfully be charged by the licensed insurer concerned.
(6) If the Authority has not withdrawn its rejection of a premium within 4 weeks after a request to reconsider the rejection, the matter is to be arbitrated under this section. The following provisions have effect--(a) The Commercial Arbitration Act 2010 applies to an arbitration under this section, subject to this Act and the regulations. The Authority and the licensed insurer concerned may by agreement appoint a person to act as arbitrator in connection with the matter. Failing agreement within 7 days, paragraphs (b) and (c) apply.(b) The Independent Pricing and Regulatory Tribunal (established by the Independent Pricing and Regulatory Tribunal Act 1992 ) may act as arbitrator to hear and determine such a matter.(c) Alternatively, that Tribunal may appoint a person to act as arbitrator in connection with the matter. The person is to be appointed from a panel constituted by the Minister and consisting of persons who have appropriate knowledge and understanding of economics, general insurance and the interests of consumers.(d) The regulations may make provision for or with respect to the arbitration of matters under this section.
(7) The arbitrator may determine the premium that may be charged by the licensed insurer, being a premium that in the arbitrator's opinion is sufficient to fully fund the present and likely future liability of the licensed insurer under this Act.
(8) For the purposes of this section, a premium will fully fund a liability referred to in this section if the premium is sufficient--(a) to pay all acquisition and policy administration expenses of the licensed insurer concerned, and(b) to provide a sum of money that together with anticipated investment income is equal to the best estimate of the cost of claims plus claim settlement expenses (in inflated dollars) at the assumed date of settlement, and(c) to provide a profit margin in excess of all claims, costs and expenses that represents an adequate return on capital invested and compensation for the risk taken, and(d) to provide for such other matters as a prudent insurer should, in all the circumstances, make provision for.