Election special: Government names priorities in insurance

With Australia just days away from an election and a possible change of government, Broker Buzz asked representatives from each major party to outline their plans and priorities for the insurance industry.

However, despite repeated requests for comment – and repeated assurances comment would be provided – only Labor provided a response, with Coalition spokesman for financial services Senator Mathias Cormann declining to do so.

In broad-ranging comments, a spokesman for Assistant Treasurer and Minister for Consumer Affairs David Bradbury flagged further insurance reform, a focus on tackling insurance affordability issues through mitigation and Federal action on rises in the strata title market.

“A re-elected Labor Government would continue our reform agenda in the insurance sector,” he says.

“The most recent installment was the passage of the Insurance Contracts Amendment Bill 2013, which incorporated long overdue reforms for the sector that benefit both insurers and customers.

“Appointing the National Insurance Affordability Council [NIAC] in order to address instances of poor affordability is the next priority for a re-elected Rudd Labor Government in the insurance sector.”

The spokesman says the Government is concerned about rising insurance premiums and acted to address that with $100 million over two years for flood mitigation works.

“Mitigation of natural disaster risks is the only sustainable and responsible way to reduce insurance premiums as it reduces risks,” he says.

“The NIAC will assess opportunities to mitigate risks in areas with high insurance premiums, and monitor reductions in premiums as risks are diminished.

“The success of the initial two years of National Insurance Affordability Initiative [NIAI] funding will be assessed against the results achieved, with the potential to increase funding should this approach prove successful.

“Importantly, the NIAC will also be charged with leading the Government’s response to affordability challenges in the strata title insurance market.”

Cormann has previously told IRP the Coalition would abandon Labor’s proposed Unfair Terms amendments to the Insurance Contracts Act, which were introduced to Parliament but failed to pass before the election was called.

“Instead we will re-engage in discussions with all relevant stakeholders about the best way forward,” he says.

“The legislation was clearly not ready for introduction. There are a whole series of problems and unresolved issues with the current draft of the Bill.”