Insurance inquiry result
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.