The National Insurance Brokers Association (NIBA) has provided a submission to the Independent Pricing and Regulatory Tribunal (IPART) inquiry into the Home Building Compensation Fund (HBCF), calling for drastic reforms to guarantee the future of the fund.
NIBA’s submission to the IPART inquiry echoed its concerns regarding the economic viability of icare as a state insurer, drawing attention to the increasing losses incurred by the fund due to historic under–pricing of premiums.
NIBA’s submission also highlighted the need for holistic reforms to the home building protections framework. It highlighted the need for underwriters to be able to accurately identify and price risks. NIBA noted that illegal phoenix activity remains an impediment to the efficient operating of the fund as the nature of this activity means that the HBCF is the only recourse available to affected homeowners.
In the submission NIBA called for a number of reforms including real-time monitoring of builders’ financial positions, the splitting of the current hbcf product into separate defects and insolvency products, better use of data analytics to help underwriters identify illegal phoenix activity and the ability for private insurers to limit insurance to high risk builders should they re-enter the market.
NIBA would like to thank its members for their feedback during the submission process. You can access the submission in its entirety here. You can access the entire submission on the NIBA website here.