The Australian Consumers Insurance Lobby (ACIL) has released a comprehensive report shedding light on regulatory deficiencies within the strata insurance sector.
Following its Nationwide Survey on Questionable Practices in Strata Insurance, initiated on March 20, ACIL has presented its findings, consolidating diverse feedback into a concise overview. The report not only underscores significant issues but also outlines ACIL’s advocacy strategies and reform initiatives for the future.
Tyrone Shandiman, Chair of ACIL, lauded the robust response to the survey, with 87 stakeholders actively participating, surpassing initial expectations. Shandiman emphasized the commendable engagement from industry insiders, citing valuable insights, including anonymous disclosures exposing dubious practices within the sector.
Key revelations from ACIL’s survey on strata insurance:
The survey uncovered additional concerns, such as conflicts of interest within the supply chain. Ten individuals, comprising five strata managers and five insurance brokers, have been flagged for further investigation by ACIL. These findings may prompt regulatory actions involving bodies like the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC).
Respondents expressed confusion regarding the oversight of the sector, highlighting the need for clearer governance and regulatory frameworks.
The report highlighted a culture where ethical lapses are commonplace, and illicit behaviors are sometimes incentivized, suggesting systemic issues rather than isolated incidents.
Dissatisfaction with the Strata Community Association (SCA) was apparent, with some advocating for substantial reforms or a complete overhaul of the organization.
Calls for comprehensive review to address strata insurance issues:
The identified concerns extend beyond strata insurance, pointing to broader issues within the strata management industry. ACIL urges an extensive review to address a wide range of consumer issues.
ACIL emphasizes the necessity of a government inquiry to elucidate contentious practices, which it believes is vital for enhancing the efficacy of strata managers and empowering consumers to make informed decisions.
Additionally, ACIL seeks support from the insurance industry for stamp duty reform.
The release of the ACIL report underscores the urgent need for regulatory clarity and reform within the strata insurance sector, with implications reaching beyond insurance to broader industry practices.
