icare will be engaging with brokers about the operational aspects of the NSW Government’s proposed changes to the NSW Home Building Compensation Fund (HBCF).
First, it will be hosting a broker briefing on the HBCF reforms on 16 November at 10am at the Castle Grand Community Centre, 14 Pennant Street, Castle Hill. Brokers should have received an invitation already.
Second, it intends to set up a broker advisory committee and is calling for nominations for representatives.
Last week, Minister for Innovation and Better Regulation Victor Dominello said the current scheme has been in significant deficit for many years and is in need of reform.
The proposals include, among other things, phasing out of broker commissions and allowing insurers to offer split cover for defects and non-completion. However, benefits will be unchanged.
In terms of commissions, icare has since clarified that brokers will be able to charge builders “competitively set fees”, following the removal of the 15 per cent commission currently being paid by the HBCF.
Legislation will also be enacted to allow for SIRA licensing of private insurers.
In the meantime, icare intends to introduce risk-based premiums based on the risk profile of the builder. It will also set up a builder self-service portal for lodging applications, job closures and eligibility profile reviews.
This document provides more information about the icare operational response to the proposal.
NIBA is in discussions with the NSW Government and will be monitoring developments carefully. We will provide members with further information about these changes as they come to hand.