Motor Accident Guidelines - Determination of insurance premiums for taxis and hire vehicles - October 2018 (NSW)

Published LW 5 October 2018 (2018 No 572)

Motor Accident

Guidelines

Determination of insurance premiums

for taxis and hire vehicles

State Insurance

Regulatory
Authority

October 2018

Published LW 5 October 2018 (2018 No 572)

Contents

Introduction.......................................................................................................................................................... 3

Classes of vehicle to which clause 7 of Schedule 4 to the Act does not apply ..................... 4

Operation of these Guidelines ..................................................................................................................... 4

Premiums to be paid before and during the policy period ............................................................. 4

Relevant factors of comparison to ensure similar premiums are paid by taxis and

hire vehicles for the premium part based on distance travelled ............................................ 4

Method of determining distance travelled by taxis and hire vehicles ................................. 5

Special provisions for taxis (opt-in or opt-out) .................................................................................... 5

Special provisions for hire vehicles ............................................................................................................ 6

Premiums paid on behalf of policy holders ............................................................................................ 6

T-plate taxis (opt-in) premium determination ...................................................................................... 7

TC-plate taxis (opt-in) premium determination ................................................................................... 7

Taxis (opt-in) premium adjustments ......................................................................................................... 8

Taxis (opt-out) refunds by reference to distance travelled ............................................................ 8

Hire vehicles premium determination ....................................................................................................... 9

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Introduction

These Motor Accident Guidelines: Determination of premiums for taxis and hire
vehicles are made under section 2.26 of the Motor Accident Injuries Act 2017
(the Act) and under clause 7 of Schedule 4 to the Act.

In these Guidelines, the following words have the same meanings as they have in
the Point to Point Transport (Taxis and Hire Vehicles) Act 2016. As at
publication of these Guidelines:

hire vehicle means a motor vehicle that is used to provide a passenger service
that is not a taxi service.

passenger service means the transport, by a motor vehicle (other than a bus), of
passengers within, or partly within, NSW for a fare. Note: a taxi service is a type
of passenger service, as is a service provided using a hire vehicle.

provide a booking service means carry on the business of:

(a)	taking bookings for taxis or hire vehicles to provide passenger services (whether immediately or at a later time), and
(b)	communicating the bookings to drivers for passenger services or providers of passenger services.

provide a passenger service means carry on the business of providing a

passenger service.

provide a taxi service means carry on the business of:

(a)	facilitating the provision of a taxi service, or
(b)	providing a taxi service.

provider of a booking service, passenger service or taxi service means the

person who provides the service.

taxi means a motor vehicle used to provide a taxi service;

taxi service means a passenger service where the transport is by a motor vehicle

that:

(a)	plies or stands for hire on a road or road related area, or
(b)	is authorised under this Act to ply or stand for hire on a road or road related area (whether or not the motor vehicle is hired by other means for the purposes of providing the passenger service).

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Published LW 5 October 2018 (2018 No 572)

Classes of vehicle to which clause 7 of

Schedule 4 to the Act does not apply

Despite anything else that is stated in these Guidelines, Clause 7 of Schedule 4
to the Act does not apply to the following class of vehicles:

• hire vehicles engaged by a booking service provider or a group of related booking service providers who book fewer than 10,000 paid fare trips annually, where Group of related booking service providers includes where two or more booking service providers are connected

by a “close associate” as described under Section 33 of the Point to

Point Transport (Taxis and Hire Vehicles) Act 2016.

Operation of these Guidelines

Insurance premiums for third party policies held in respect of opt-in taxis and
hire vehicles providing passenger services are to be paid as set out in these
Guidelines.

Premiums to be paid before and during the policy period

Insurance premiums for third party policies for taxis (opt-in only) and all hire
vehicles must be paid in part before the issue of the policy and in part after the
issue of the policy unless otherwise provided for in these Guidelines.

Relevant factors of comparison to ensure similar premiums are paid by taxis and hire vehicles for the premium part based on distance travelled

Operational time is considered by the Authority to be a relevant factor. Taxis
invariably operate 24 hours each day and 7 days per week. Hire vehicles
generally operate on a part-time basis for specific trips.

The activities in which the vehicles are engaged is an additional relevant factor. Hire vehicles are predominately private use vehicles that are used intermittently for specified pre-booked passenger services.

Taxis have plying and standing rights in contrast to hire vehicles. Unlike hire
vehicles taxis have a pure commercial purpose and cannot be used for private
purposes.

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Method of determining distance travelled by taxis and hire vehicles

Considering the relevant factors of comparison in clause 1.6, 1.7 and 1.8, the
methodology used to determine the distance travelled differs between taxis and
hire vehicles.

The distance travelled for taxis is based on total kilometres travelled, reflecting the vehicle operation time, entirely commercial purpose and types of activities including unbooked work.

For hire vehicles, the distance travelled is restricted to fare paying kilometres
travelled, recognising that any other distance travelled is for a private purpose.

Special provisions for taxis (opt-in or opt-out)

Owners of taxis may choose not to have the premium, or part of the premium,
paid on the basis of total distance travelled (opt-out option).

The premium determination for taxis that opt-out is in accordance with Part 1 of
the Motor Accident Guidelines: Premium determination and is not varied by
these Guidelines.

For taxis that choose to have the premium, or part of the premium, to be paid
on the basis of total distance travelled (opt-in option) the premium
determination must be in accordance with Table 1.1. For taxis, the cents per total
kilometres travelled rates include GST and input tax credit loading.

Table 1.1 Premium determination for taxis that choose to have the premium, or part of the premium, paid on the basis of total distance travelled (opt-in option)

Clause 1.2	Plate type	Part paid before	Part paid after issue	Part adjusted/
definition	issue of policy	of policy	after issue of
policy
(deposit	(instalment
insurance	insurance premium,	(net kms)
premium)	pre-paid kms)
Taxi	T-plate	A third of the	A third of the annual	5¢ per km
annual opt-out	opt-out premium at
up to 107,000
premium	4 months and 8
km limit
months after the policy
commencement date
Taxi	TC-plate	Half of the	Half of the annual	3.3¢ per km
annual opt-out	opt-out premium at
up to 85,000
premium	6 months after the
km limit
policy
commencement date

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Published LW 5 October 2018 (2018 No 572)

Special provisions for hire vehicles

For hire vehicles, the part of the premium paid before the issue of the policy is
the annual premium determined in accordance with Part 1 of the Motor Accident
Guidelines: Premium determination. The basis on which the remainder of the
premium is to be paid includes the number of fare-paying trips undertaken by
the vehicles, the fare-paying distance travelled by the vehicles and the booking
service provider activity in which the vehicles are engaged.

If the activity of the booking service provider or a group of related booking service providers used by a hire vehicle is reasonably expected to carry out 10,000 or more paid fare trips annually the premium determination must be based on each paid fare trip undertaken by the hire vehicle in accordance with

Table 1.2. The cents per fare paying kilometres travelled by hire vehicles includes
GST and input tax credit loading.

Table 1.2 Premium determination when the booking service provider is reasonably expected to carry out 10,000 or more paid fare trips annually

Clause 1.2	Part paid before	Rating region trip	Part paid after issue of
definition	issue of policy	commences	policy
Hire vehicle	Annual premium	Metro, Newcastle/	10¢ per fare paying km for
determined in	Central Coast or	each trip
accordance with	Wollongong
Part 1 of the
Outer Metro or
Motor Accident	6.6¢ per fare paying km
Country
Guidelines:	for each trip
Premium
determination

Premiums paid on behalf of policy holders

The part of the premium paid after the third party policy is issued may be paid by another person on behalf of the policy holder in the manner provided for in these Guidelines.

Where the remainder of a premium has not been paid by the policy holder
during the period for which the policy was issued, under these Guidelines, those
premiums may be paid on behalf of the policy holder by:

1.18.1	the provider of a booking service;
1.18.2	the provider of a passenger service; or
1.18.3	any other person conducting a business in relation to those vehicles.

It remains the responsibility of the holders of third-party policies to ensure that
the part of their policies to be paid during the period of the policy are paid on an
ongoing ¢ per kilometre basis, as provided for in these Guidelines.

It remains the responsibility of the holders of third-party policies to enter into appropriate arrangements to ensure that any premiums payable on the policy

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holder’s behalf during the period for which the policy was issued are paid in the

manner required by these Guidelines and any other relevant instrument or

agreement.

T-plate taxis (opt-in) premium

determination

Determination of the deposit insurance premium for all taxis registered with a T-
plate (including applicable stand-by taxis) must be derived by applying one
third of the annual total premium payable (opt-out premium). Insurers must
immediately issue a third-party policy after accepting payment of the deposit
premium.

Subsequent instalment premiums charged after 4 and 8 months of cover must equal one-third of the annual total premium payable (opt-out premium). These instalments represent a pre-payment for an expected number of kilometres that

is determined with reference to the specified rate per kilometre.

In these Guidelines, declared kilometres means a taxi’s odometer readings
entered into the Authority’s online portal. For taxis where the policy holder has

opted in, to having part of the premium paid on the basis of total distance
travelled, declared kilometres must be provided to the Authority:

1.23.1	at the issue of the policy, and
1.23.2	no more than 28 days prior to 4 months after the policy commencement date, and
1.23.3	no more than 28 days prior to 8 months after the policy commencement date, and
1.23.4	no more than 28 days prior to the policy’s expiry date.

For T-plate taxis (opt-in), net kilometres are calculated by taking the difference

between a taxi’s declared kilometres and the pre-paid kilometres at 4 and 8

months after the policy commencement date and at the policy expiry date.

TC-plate taxis (opt-in) premium

determination

Determination of the deposit insurance premium for all taxis registered with a
TC-plate (including applicable stand-by taxis) must be derived by applying one
half of the annual total premium payable (opt-out premium). Insurers must
immediately issue a third party policy after accepting payment of the deposit
premium.

One subsequent instalment premium is charged after 6 months of cover and must equal one half of the annual total premium payable (opt-out premium). This instalment represents a pre-payment for an expected number of kilometres

that is determined with reference to the specified rate per kilometre.

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For taxis where the policy holder has opted-in to having part of the premium
paid on the basis of total distance travelled, declared kilometres must be
provided:

1.27.1	at the issue of the policy, and
1.27.2	no more than 28 days prior to 6 months after the policy commencement date, and
1.27.3	no more than 28 days prior to the policy’s expiry date.

For TC-plate taxis (opt-in), net kilometres are calculated by taking the difference

between a taxi’s declared kilometres and the pre-paid kilometres at 6 months

after the policy commencement date and at the policy expiry date.

Taxis (opt-in) premium adjustments

For insurance premium adjustments during or after the policy period, insurers
must, (subject to the cumulative premium not exceeding the opt-out premium),
where applicable either:

• charge extra insurance premiums for additional kilometres travelled compared to the number of kilometres pre-paid as part of the previous instalment period premium, or

• credit insurance premiums to the current instalment for reduced kilometres travelled compared to the number of kilometres pre-paid as part of the previous instalment period premium.

These adjustments can be either:

• charged to the policy holder or refunded as a separate transaction subject to the adjustment exceeding $5; or

• added to or credited against the policy holder’s current instalment.

Taxis (opt-out) refunds by reference to distance travelled

For the purposes of these Guidelines digital information includes taxi odometer
readings.

Insurers must provide refunds for taxis registered with plates that have ‘T’ or

‘TC’ as the prefix, and applicable stand-by taxis, after the expiry of an annual

policy period only if the following conditions are applicable:

1.32.1	An annual policy was issued with an effective date after 30 November 2017 and before 1 April 2018; and
1.32.2	The full and correct premium for a taxi was paid; and
1.32.3	The policy has expired (and was not cancelled prior to expiration); and
1.32.4	The digital information provided relates to two dates on which
declared kilometres have been entered into the Authority’s online

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Published LW 5 October 2018 (2018 No 572)

portal, being the date on or up to 28 days before the policy
commencement date and the date on or up to 28 days before the

policy expiry date; and

1.32.5	Total kilometres travelled during the policy period calculated by deducting the initial declared kilometres from the final declared kilometres does not exceed 107,000 kilometres for T-plate taxis and
85,000 kilometres for TC-plate taxis.

The refund is the difference between the annual premium paid and the derived
total opt-in premium applicable to the total kilometres travelled.

Hire vehicles premium determination

The insurance premium payable before the issue of a third-party policy for all
hire vehicles that provide a passenger service must be determined in
accordance with Part 1 of the Motor Accident Guidelines: Premium
determination.

Determination of the part of the insurance premium to be paid based on
distance travelled during the period for which the policy is issued must be
calculated by:

1.35.1	Determining the total fare paying kilometres while providing a passenger service, during the period for which the policy is issued. Non-fare paying kilometres travelled are excluded.
1.35.2	Charging an insurance premium (including GST and input tax credit loading) at the rate as defined in Table 1.2.

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Disclaimer

This publication may contain information that relates to the regulation of workers compensation insurance and motor accident third party (CTP) insurance in NSW. It may include details of some of your obligations under the various schemes that the State Insurance Regulatory Authority (SIRA) administers.

However to ensure you comply with your legal obligations you must refer to the appropriate legislation as currently in force. Up to date legislation can be found at the NSW Legislation website legislation.nsw.gov.au

This publication does not represent a comprehensive statement of the law as it applies to particular problems or to individuals, or as a substitute for legal advice. You should seek independent legal advice if you need assistance on the application of the law to your situation. This material may be displayed, printed and reproduced without amendment for personal, in-house or non-commercial use.

Motor Accidents Insurance Regulation, Level 6, McKell Building, 2-24 Rawson Place, Sydney NSW 2000

CTP Assist 1300 656 919

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