Motorists will be able to pick their compulsory third-party insurance from a range of providers as part of the South Australian government's sale of the Motor Accident Commission.
The proposed private sector model will include a multi-provider market with a set number of eligible insurers for the first three years, SA Treasurer Tom Koutsantonis told Parliament.
"Our view is that the private sector is better at issuing insurance premiums than a government monopoly," Mr Koutsantonis said.
Premium prices will remain fixed for the first three years with CPI-like increases
"Importantly, this CTP insurance model provides a seamless transition for South Australian motorists.
"The Department of Planning, Transport and Infrastructure will continue to issue CTP insurance renewal notices as part of the vehicle registration process. Current payment methods will also remain.
"Premium prices will remain fixed for the first three years with CPI-like increases."
Private insurers would offer CTP insurance in South Australia from July next year but a fully contestable market would not open up until 2019, Mr Koutsantonis said.
"The new private sector ... model will continue to meet the needs of motorists and persons injured in motor vehicle accidents," he said.
As a result of the reforms, which include selling MAC assets, $852.9 million was paid into the Government's Highways Fund in December. A further $300 million contribution is expected in 2016-17.
SA Opposition Leader Steven Marshall questioned whether the Motor Accident Board unanimously supported the Government's decision to sell the MAC.
He also said the Treasurer needed to explain if the $852.9 million was a balance sheet item or if it would diminish the deficit in the coming State Budget.