CTP Insurer Late Payment Interest: Key Legal Obligations in NSW
When a CTP insurer delays payment of statutory benefits, injured claimants in NSW may be entitled to interest under the Motor Accident Injuries Act 2017 (MAIA). This article explains the legal obligations of insurers, how SIRA regulates this, and the practical steps injured people should take.
Legal Basis for Late Payment Interest
- Under the MAIA, CTP insurers must pay statutory benefits such as weekly payments and treatment benefits. While the Act does not explicitly mention interest, SIRA guidelines indicate that delays in payment may trigger interest obligations under the
- Statute of Limitations* and
- Interest on Statutory Claims* principles. These principles apply to all statutory claims, including CTP benefits, and require insurers to pay interest for late payments unless they can demonstrate a valid reason for the delay.
How SIRA Regulates Late Payment Interest
SIRA’s Motor Accident Claims page confirms that claimants must notify insurers of delays in payment. If an insurer fails to pay within the statutory timeframe, claimants may seek interest as a remedy. SIRA also advises that claimants should document all communication with insurers to support any interest claim.
Remedies for Injured Claimants
If a CTP insurer delays payment, injured claimants may:
- Request a written explanation for the delay
- Submit a formal complaint to the insurer
- Seek mediation through SIRA’s dispute resolution process
- Lodge a complaint with the NSW Civil and Administrative Tribunal (NCAT) if the insurer refuses to pay interest
Time Limits for Claiming Interest
NSW law imposes strict time limits for claiming interest. Generally, claimants must act within 6 months of the payment being due to pursue interest. However, this period may be extended if the insurer’s delay was due to exceptional circumstances, such as a court order or administrative error.
Practical Steps to Take
- Document all communication with the insurer, including dates and details of any delays.
- Request written confirmation of the payment schedule and any delays.
- Submit a formal complaint to the insurer within 6 months of the due date.
- Seek mediation through SIRA if the insurer refuses to pay interest.
- Consult a legal professional if the insurer’s delay exceeds 6 months or if you face financial hardship due to the delay.
When to Seek Legal Advice
Injured claimants should seek legal advice if:
- The insurer refuses to pay interest or disputes the claim
- The delay exceeds 6 months
- You face financial hardship due to the delay
- You need assistance with dispute resolution or mediation
Example Scenario
Consider a claimant who suffered a soft-tissue injury in a car accident. The insurer delayed payment of weekly benefits for 8 months. Under SIRA guidelines, the claimant may be entitled to interest for the 8-month delay, provided they can prove the insurer’s failure to pay within the statutory timeframe.
Next Steps
Time limits and procedural requirements may apply. To request contact about your circumstances, complete the quick, no obligation enquiry form.