The Federal Government has quietly deferred a controversial plan to encourage greater use of unauthorised foreign insurers.
Brokers had raised serious concerns about an Abbott Government initiative to attempt to lower insurance premiums in disaster-prone North Queensland by fostering greater UFI involvement, a prospect first raised last October.
The plan had raised hackles outside of Queensland too, amid revelations any changes to UFI regulations would be made nationally.
However, Warren Entsch, the Federal Member for Leichhardt in Far North Queensland has released a statement saying the changes had been called off for now, in light of the establishment of a Northern Australia Insurance Premiums Taskforce.
Headed by former Australian Treasury Executive Director Mike Callaghan, the taskforce will investigate methods for increasing insurance affordability in the north of the country.
“This announcement represents a significant potential shift in the northern insurance market,” Entsch says.
“Therefore, previously announced changes which allow licensed insurance brokers to sell policies from foreign insurers will be deferred until this process is complete.”
Brokers are currently able to sell policies from UFIs provided certain conditions are met but the Federal Government proposed greater UFI involvement.
Last financial year, brokers placed more than $1.3 billion in premium with UFIs, or about 7% of all premium written by brokers.
For more on using UFIs, read our magazine feature here.