By Ian Llewellyn of NZPA

Wellington, March 11 NZPA - It would cost ACC around $19 billion to meet the solvency levels required by commercial insurance companies, MPs were told today.

ACC chairman John Judge told MPs considering the Insurance (Prudential Supervision) Bill that the state owned corporation would like to be covered by the bill, but there was "no way" it could meet the solvency provisions though it would like to do so in the long run.

The scheme's claim liability -- the future cost of existing claims -- is around $23 billion.

Current net assets, which ACC uses to cover future costs, is around $11b, leaving a gap of $12b.

A commercial insurer would be required to cover this and have another $7 billion as a risk contingency.

The bill lays out a supervisory regime for insurance companies to be overseen by the Reserve Bank.

Mr Judge said the discipline this would bring would be invaluable for ACC.

This would include six monthly reporting, strict criteria and obligations for directors and office holders, an independent actuary and a statutory risk management profile

Finance select committee chairman Craig Foss appeared to be sceptical about the idea, saying ACC did have many of those disciplines and there was nothing stopping it from imposing them even if they were not included in the new regime.

Other MPs wondered whether the insurance law might clash with ACC legislation.

Mr Foss said the committee would seek further advice on ACC's request to be partly covered by the law.

The Government recently pruned ACC coverage and treatment as well as hiking fees to meet the growing cost of claims and treatment.