Industry body concerned by North Queensland insurance plans

Industry body concerned by North Queensland insurance plans | Insurance Business

Industry body concerned by North Queensland insurance plans
The Insurance Council of Australia (ICA) has voiced its concerns with the Federal Government’s plans to allow unauthorised foreign insurers easier access to the Australian market following North Queensland reforms.

It was announced last week that the Federal Government would set-up an online aggregator to allow consumers to compare insurance policies and to allow brokers to sell insurance policies from foreign insurers.

ICA Acting CEO Karl Sullivan voiced concerns about the entrance of foreign insurers into the Australian market, saying; “Existing licensed insurers operate under some of the tightest regulations of any industry sector, yet Unauthorised Foreign Insurers (UFI) may not be held to the same legal, prudential and capital requirements, nor the same consumer laws and remedies.

"The industry is concerned consumers who buy a product from a UFI under these new guidelines may not be able to rely on that company to deliver on its promise if the consumer needs to make a claim.”
 
Sullivan isn’t the only one concerned by the Federal Government’s plans for the North Queensland market, as Insurance Business reported last week, brokers in Queensland are also worried by the changes set to come into force in March 2015.
 
Sullivan continued; "The ICA believes all market participants selling retail insurance products must abide by the same set of laws and capital requirements, and exceptions should not be made that would diminish consumer rights and create further uncertainty."
 
As has been stressed by many regarding the government planned aggregator, Sullivan was keen to point-out the dangers over a price-reliant system, saying;  “As ASIC and other agencies and organisations have pointed out, buying a product on price alone may result in the consumer not having cover for the risks they face. Buying a product should first focus on its features and benefits
 
"This is especially important in North Queensland, which is one of Australia's most exposed regions to natural disasters."

The proposed engineering assessment for all strata-title properties in the region was praised by the ICA as they have developed a comprehensive strata building inspection scheme alongside James Cook University which has been made available for government access and implementation.
2 Comments
  • Ageing Broker 2014-10-27 12:56:52 AM
    The government's 'dog whistle' here is to those insurers who have pulled out of North Queensland and who won't underwrite business north of Noosa. If you are going to be an authorised insurer in Australia surely you have to offer a service to the whole community not just the major population centres - doing this would obviate the need for the government to threaten competition from UFI's .
    Post a reply
  • Karen 2014-10-27 2:53:44 AM
    You cannot put a fence around FNQ - if our current government proceeds with this outrageous plan, other states will follow i.e. Victorian Bush fire areas. This is a truly country wide issue that needs to be stopped in its tracks. The Finance Minister's proposal is either : 1. ignorant of the consumer protection measures we, as an industry and successive governments, have built over the last 30 years or 2. arrogant enough to believe these efforts are of no consequence. It is a very interesting situation when you start looking at statistics. FNQ population <300,000 (Less than 2% of the Australian Population)of which about 25% are under 18 years of age. That leaves 225,000 persons within FNQ. Lets say that of these, 2/3rds own dwellings, we're down to 150,000. Lets be optimistic and say 80% of owners hold insurance. For the sake of say 120,000 policy owners, we now see our government cow tailing to yet another minority about the cost of insurance in FNQ and possibly jeopardising our industry on a national level. When our learned government came up with their cunning plan, I wonder if they thought about the national ramifications of their actions, or better still, the very interesting theory that our local insurers are just looking for a reason to abandon the 2% of Australia which has the most frequent and highest value natural disaster losses within our shores. I can't see how this proposal will improve competition, particularly in the north.
    Post a reply