Final strata bill being drafted

Final strata bill being drafted

Final strata bill being drafted The NSW Government’s department of Fair Trading is said to be drafting a final bill on strata law reform with a view to introducing it to parliament “in the next few months”.

The reforms, detailed in a position paper entitled Strata & Community Title Law Reform, include requiring the managing agent to disclose at each annual general meeting the circumstances, amount and services provided in respect of any commissions received during the previous 12 months; and requiring agents to obtain at least three quotes for products such as insurance.

A spokeswoman for the Fair Trading Department told Insurance Business that the final draft of the bill is due “in the next few months”.

A report by the Sydney Morning Herald suggests that a draft bill is currently being circulated around ministers, who have until Friday to read it. It is understood that conflicts of interest are covered by the regulation.
 
4 Comments
  • Keith L 13/01/2014 10:10:47 AM
    As an insurance intermediary who has strata title properties covered, I hope the body drafting the legislation has some knowledge of the insurance industry. In most states the body corporate is required to insure the property but many unit holders seem to be able to insure their own unit and are sometimes completely oblivious to the fact that their structure is covered by the strata title policy. I believe this is possible because not all companies provide strata title cover and their operators fail to establish at the time of quoting that the property is under strata title.
    While I have no problem with disclosure of conflicts of interest, to inflict the need for body corporates to obtain 3 quotes every year for every service, including insurance, is somewhat an over-kill in consumer protection and could well lead to unnecessary unit holder confusion.

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  • Paul Burstow 13/01/2014 12:56:27 PM
    Keith

    That's why we have brokers to explain to clients the difference between Strata Insurance and Contents Insurance . The agents /building maintenance companies should earn their remuneration like brokers and explain the difference of contracts to their clients and alert Body Corporate Boards to inform their unit holders of the difference.
    True brokers obtain quotes from ALL insurers in this market. I'm sure if you were a unit holder paying the premiums you would not think this was overkill. You must think all contracts and premiums are the same. That why agents are extensions of insurance companies WE ARE NOT
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  • Keith L 13/01/2014 4:02:43 PM
    Thank you for your enlightenment Paul but I am aware that not all premiums and contracts are the same and the difference in operation of intermediaries and brokers is not a subject appropriate to debate here.
    A significant percentage of my strata title covers are for small titles of 2 to 10 members most of which have no formal body corporate. Instead one of the members assumes responsibility for placing the insurance and collecting each members' share of premium. In most of these situations my experience is that the person assuming the responsibility does so reluctantly and would not have the administrative skills necessary to obtain 3 formal quotes for every service. It is also my experience that most of the other members are not particularly interested provided they do not have to get involved in the process. It is another case - much like the over regulation of the financial services industry - where uneducated and inexperienced regulators are causing unnecessary expense and inconvenience by imposing ill-informed, idealistic and often unnecessary rules and regulations. When it is too late, the unintended consequences come to light and the people the legislation was supposed to help are in fact hindered.
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