The WA Parliament’s Economics and Industry Standing Committee has published its final report. Stephen Moir, CEO of MTA WA commented: "The work of the Committee has been very thorough and many of their findings support what we have been saying for years about the behaviour of insurance companies."
Most significantly, the Committee have made three recommendations:
1) The Treasurer to write by 28 February 2019 to the Commonwealth Treasurer seeking their agreement to direct the ACCC under the Competition and Consumer Act 2010, to undertake an in-depth inquiry into possible anti-competitive conduct and misuse of power in Australia’s smash repair industry.
2) The Minister for Commerce and Industrial Relations to bring legislation to the Parliament by the end of 2019 to mandate the Motor Vehicle Insurance and Repair Industry Code of Conduct in Western Australia.
3) The Minister for Commerce and Industrial Relations to consider the role of the Small Business Commissioner as part of the process for the introduction of legislation mandating the Motor Vehicle Insurance and Repair Industry Code of Conduct in Western Australia.
This report and its recommendations are one of the most significant outcomes for the smash repair industry in years, says Moir. It will result in a mandated code, similar to the one in operation in NSW. "It will result in greater scrutiny on insurers and importantly, repairers will now be able to go to the Small Business Commissioner in WA who will have the power to instruct insurers where a breach occurs.
"It will also result in a renewed focus at the national level of our industry which will lead to improvements for repairers.
The MTA WA has worked incredibly hard on this issue during the year and I want to personally thank those members who were courageous enough to provide evidence to the Committee. It was the evidence of our members that made the difference," Moir said.
Parliamentary report findings
The committee report said: "A range of allegations have been made, in multiple inquiries and forums, regarding the anti-competitive conduct of insurance companies. In this inquiry, the types of alleged misconduct included:
- Inappropriate ‘steering’ behaviours, whereby insurance companies direct customers away from businesses outside of their ‘preferred’ networks
- The introduction of fixed prices for various forms of repair, unfairly driving average costs unsustainably low
- Unequal bargaining power when agreeing the scope of repairs to vehicles; and
- The utilisation of ‘funny time, funny money’ to artificially price repairs.
The Committee also pursued issues relating to the use of ‘funny time, funny money’ pricing methodologies. Again, this was denied by the insurers. However, direct evidence was provided to the Committee, suggesting that this unhelpful practice is utilised by at least one major company.
A number of inquiries (at both the State and Federal level) have repeatedly urged the Commonwealth Government to take
action, investigate and meaningfully address anti-competitive conduct in the smash repair industry. However, it is yet to take action.
The apparent nation-wide scope of the problem, and increased market concentration in other States, lends weight to the need for Federal action. Similar to the calls of industry and previous state and federal inquiries, this Committee considers that the Commonwealth should act. We have accordingly recommended that the Treasurer write to the Commonwealth Treasurer, seeking their agreement to direct the Australian Competition and Consumer Commission to undertake an in-depth inquiry
into possible anti-competitive conduct and misuse of power.
You can dowload the report here: WA Parliamentary Report