analytics

Final ACCC Northern Australia Insurance Inquiry !

 

 

SCA (QLD) has worked closely with the ACCC over the last three years of the inquiry and prior to that as well, providing detailed analysis and information relating to the rapdily growing strata sector in Queensland.  In late 2017 SCA (Qld) surveyed members for our submission to the ACCC, finding that the quality and transparency of insurance information supplied by insurers should be improved. SCA (Qld) was one of many stakeholders who called for greater clarity on the factors impacting premium pricing (such as cyclone risk ratings) and we noted a breakdown of insurance premiums would assist with this understanding. In 2019 SCA (Qld)’s submission highlighted affordability and availability examples in NQ. 

 

Recommendation: Standardise definitions of prescribed events

The Treasury’s review of the standard cover regime should develop a proposal to standardise the definitions of prescribed events (including ‘action of the sea’, ‘impacts’ and ‘storm’) to enable greater certainty for consumers and comparability of products.
 

Recommendation: Strata managers to be remunerated by body corporate only

State and territory legislation governing strata managers should be amended to prohibit strata managers from accepting payments in relation to arranging strata insurance other than those agreed to, and made by, their body corporate.
 
Recommendation: If governments want to provide immediate relief to consumers facing acute affordability pressures, they should consider direct subsidies over other measures 

There are calls for government intervention through a range of measures to address acute affordability and availability issues in the supply of insurance in northern Australia. We investigated the relative merits of measures including government reinsurance pools, government insurers, direct subsidies, mitigation programs and licence conditions. If governments want to intervene, they should consider doing so through direct subsidies based on both premium level and income eligibility requirements, rather than government reinsurance pools or other measures. Direct subsidies have the greatest potential to work in a targeted way to relieve some of the acute affordability and cost of living pressures facing consumers in higher risk areas, at a lower cost and more effectively than other measures.
 
Recommendation: Re-base stamp duty; use stamp duty revenue for affordability and mitigation

If stamp duties on insurance are maintained, the governments of Western Australia, the Northern Territory and Queensland should reduce the tax burden on consumers in higher risk areas by levying stamp duties for home, contents and strata insurance with reference to the sum insured value, rather than the premium level. A portion of revenue from stamp duties on insurance products (however they are levied) should be directed towards measures to improve affordability for low income consumers or to fund mitigation works.
 

Recommendation: Expand the remit of the Australian Building Codes Board to include property protection

The Australian Government, and state and territory governments, should expand the remit of the Australian Building Codes Board to explicitly include property protection as an objective to pursue through the National Construction Code and referenced Australian Standards.
 
Recommendation: Extend and expand the North Queensland Strata Title Inspection Program 

The North Queensland Strata Title Inspection Program is due to end on 30 June 2021. The program should continue in north Queensland beyond this date, and be expanded to other parts of northern Australia.  All the bodies corporate that Tropical Strata Services manages has undertaken this beneficial program.