In­sur­ance in­quiry re­sult

Port Douglas & Mossman Gazette - - NEWS -

A FED­ERAL Gov­ern­ment in­quiry into res­i­den­tial strata ti­tle in­sur­ance af­ford­abil­ity has largely re­jected calls for in­ter­ven­tion.

The in­quiry was launched af­ter rev­e­la­tions strata ti­tle in­sur­ance has risen by up to 800 per cent in just a few years in the Far North.

The most sig­nif­i­cant rec­om­men­da­tion an­nounced yes­ter­day has called on the Queens­land Gov­ern­ment to im­ple­ment a 12-month mora­to­rium on strata ti­tle stamp duty.

The in­quiry also rec­om­mended a re­view of the risk as­sess­ment method­olo­gies used by in­sur­ance com­pa­nies to ac­cu­rately price risk for strata ti­tle in­sur­ance cov­er­age, with a par­tic­u­lar fo­cus on what has driven up in­creases in the Far North in the past five years.

There were also rec­om­men­da­tions to in­ves­ti­gate the fea­si­bil­ity of re­quir­ing in­sur­ance com­pa­nies to of­fer res­i­den­tial strata ti­tle to all regions of Australia as part of their per­mit to op­er­ate.

The com­mit­tee also rec­om­mended the Fed­eral Gov­ern­ment in­ves­ti­gate and re­port on the ex­pan­sion of the Aus­tralian Rein­sur­ance Pool Cor­po­ra­tion cre­ated to pro­vide ter­ror­ist risk rein­sur­ance for ap­pli­ca­tion to res­i­den­tial strata ti­tle schemes.

The use of in­ter­me­di­aries to ne­go­ti­ate strata ti­tle in­sur­ance will also be in­ves­ti­gated, as will the op­tions to pro­vide strata ti­tle com­plexes with greater flex­i­bil­ity of their in­sur­ance ar­range­ments that may of­fer capped in­sur­ance cover on non-es­sen­tial as­sets or in­fra­struc­ture.

Com­mit­tee chair Gra­ham Per­rett said the re­port’s rec­om­men­da­tions would strengthen the reg­u­la­tory frame­work for body cor­po­rates, ex­am­ine the method­olo­gies for the as­sess­ment and pric­ing of risk, in­crease trans­parency in all strata ti­tle cost com­ponenets and raise con­sumer aware­ness of their rights and re­spon­si­bil­i­ties.

“The com­mit­tee has con­ducted this in­quiry in a short­ened time­frame in or­der to pro­vide the Gov­ern­ment with a clear and di­rect plan of ac­tion to al­le­vi­ate im­me­di­ate hard­ship and ad­dress longer term sus­tain­abil­ity.”

The re­port is avail­able at www.aph.gov.au/strata.

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