Understanding Insurer Internal Reviews in NSW CTP Claims
A threshold injury under the Motor Accident Injuries Act 2017 (NSW) includes a soft tissue injury and a psychological or psychiatric injury that is not a recognised psychiatric illness (adjustment disorder and acute stress disorder are the usual examples; s 1.6 and Motor Accident Guidelines Part 5).
If your motor accident compensation claim has been declined or reduced by your insurer, you may be entitled to request an internal review. This process allows the insurer to reconsider their decision based on new or additional information. In New South Wales, the Motor Accident Injuries Act 2017 (MAIA) and the Motor Accident Injuries Regulation 2017 set out the framework for these reviews. The State Insurance Regulatory Authority (SIRA) provides guidance on how insurers must conduct internal reviews, particularly in Greater Sydney, where claim volumes and complexity are high. SIRA’s position is that internal reviews are a mandatory step before escalating a dispute to the Personal Injury Commission (PIC) or seeking external review.
The Legal Framework: What SIRA Says About Internal Reviews
SIRA’s published guidance confirms that insurers must offer claimants the opportunity to have their decision reviewed internally before any external dispute process begins. This applies to all CTP claims in NSW, including those in Greater Sydney. The insurer must notify you in writing of their decision and clearly explain the reasons. You have the right to submit further information, including updated medical reports, witness statements, or evidence of lost income, to support your case during the internal review.
SIRA emphasises that internal reviews must be conducted fairly and without delay. Insurers are expected to complete the review within 28 days of receiving a request, unless there are exceptional circumstances. The review must be conducted by a person who was not involved in the original decision. If the insurer upholds their original decision, they must provide a written explanation that includes a reference to the relevant provisions of the MAIA and the Motor Accident Guidelines.
Practical Steps and Evidence That Matter
To strengthen your internal review request, gather and submit the following evidence:
- A copy of the insurer’s original decision letter
- Updated medical reports from your treating practitioner, particularly those assessing your whole person impairment (WPI) or ongoing treatment needs
- A detailed record of your lost income, including payslips and employer letters
- Photographs of the accident scene, vehicle damage, or injuries
- Witness contact details and statements
- Copies of correspondence with the insurer
SIRA notes that insurers are not required to accept new evidence that was not previously available, but they must assess it fairly. If you believe new evidence has been overlooked, clearly identify it in your submission and explain why it was not previously provided.
When to Escalate: Time Limits and Dispute Pathways
If the insurer upholds their original decision after the internal review, you may then apply to the Personal Injury Commission (PIC). The PIC is the independent body that resolves disputes about CTP claims in NSW. You must apply to the PIC within 12 months of the insurer’s final decision, or within 12 months of the date you became aware of the grounds for dispute, whichever is later.
SIRA’s guidance confirms that a claimant cannot bypass the internal review process and go directly to the PIC. The internal review is a procedural requirement under the MAIA. However, SIRA also states that a claimant may request a review of the internal review process if they believe the insurer failed to follow proper procedures or acted unreasonably.
If your claim involves a medical dispute, for example, disagreement over your WPI or whether you have a threshold injury, SIRA recommends that you first seek a second medical opinion. The PIC may require a medical report from an independent specialist to resolve such disputes.
What You Should Know About the Outcomes
An internal review does not guarantee a change in the insurer’s decision. The insurer may still uphold their original position, even after reviewing new information. SIRA’s guidance makes it clear that the internal review process is not a substitute for a formal dispute with the PIC. It is a step to resolve disputes at the insurer level, but it does not bind the insurer to change their decision.
A common mistake is to assume that a successful internal review will result in automatic compensation. This is not the case. The insurer may still deny the claim, reduce the amount, or only approve benefits for a limited period. If the insurer refuses to change their decision, you must proceed to the PIC to seek a binding determination.
A Realistic Example: How the Process Works in Practice
Consider a claimant who was a passenger in a car that was struck from behind at a traffic light in Sydney’s Eastern Suburbs. The insurer initially denied a claim for weekly income payments, stating that the injuries were not severe enough to qualify as a threshold injury. The claimant submitted a new medical report from their specialist, showing ongoing neck pain and a WPI of 10%. The insurer conducted an internal review and maintained their decision. The claimant then applied to the PIC within the 12-month time limit. The PIC later accepted the specialist’s assessment and awarded compensation for weekly payments and treatment and care benefits.
This example illustrates that the internal review is not a final decision, but a necessary step in the process. It also shows that new medical evidence can be critical in challenging a denial.
Next Steps: When to Seek Independent Advice
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