Media Release

March 28, 2002

THERE was still no evidence that proposals to cap insurance claims or make it harder for people to make a public liability claim would lead to a drop in insurance premiums for community groups, the CEO of ourcommunity.com.au, Dr Rhonda Galbally AO, said today.

Dr Galbally welcomed moves from yesterday's Federal summit such as a commitment to a national pooled community insurance scheme to give community groups a louder voice and greater strength in numbers as well as the commitment to greater education for community groups on risk management.

"Those measures provide some immediate benefits and relief for community groups who need a solution now," Dr Galbally said.

But she warned that many of the other proposals would result in a profit windfall for the insurance industry without any guarantee the industry would pass the savings onto community groups through lower premiums.

"The insurers keep hammering the myth that community groups are high-risk and want legislative protection to overcome that perceived high risk. But the results from our recent survey of community groups shows their numbers just don't stack up," Dr Galbally said.

"Our survey of 700 groups showed 96 per cent of community groups haven't had a claim in the past five years. For those that have had a claim, the average was just $8875 - hardly evidence of litigation gone mad. These proposals would make it harder for people to take legal action, will definitely provide more money for insurers but there is still no evidence they would provide any real benefits for non-profit groups.

"Insurers also want action to knock out frivolous claims - again this is not supported by the survey of community groups - but if they're not legitimate, if they are frivolous why are they paying?

"If all these proposals yesterday were adopted as suggested, insurers would be cracking open the champagne and - in our view - community groups would still be paying way too much for insurance."

Community groups wanting to register their interest in the pooled community insurance scheme can do so by visiting www.ourcommunity.com.au/ insurance/insurance_main.jsp. Information will be collected and passed onto the relevant State or local Government bodies in each state or territory.