Consumer groups are warning that the current soft insurance market may open the door to remuneration practices that could disadvantage clients unless regulators step in.
The Australian Consumers Insurance Lobby Inc (ACIL) has called on oversight bodies – including the Australian Securities and Investments Commission (ASIC), the Australian Competition and Consumer Commission (ACCC), and the Insurance Brokers Code Compliance Committee – to monitor how brokers adjust their pay structures during market downturns.
Meanwhile, a proposed reform in New South Wales to end commission-based compensation in strata insurance has sparked division. The policy, floated by the NSW government, would prohibit strata managers from earning commissions on insurance placements and instead introduce fixed-fee structures.
Consumer advocates – including ACIL and the Owners Corporation Network (OCN) – argued that eliminating commissions is critical to removing conflicts of interest and improving pricing clarity in strata insurance.
Karen Stiles, OCN policy director, said previous inquiries have uncovered significant shortcomings in the sector.
“The government’s own investigations have exposed extensive misconduct in strata insurance. These practices have cost lot owners dearly – in trust, transparency, and inflated premiums,” she said.
Read article: https://www.insurancebusinessmag.com/au/news/breaking-news/soft-market-sparks-broker-pay-transparency-fears-534705.aspx
Related article: https://ocn.org.au/backroom-deals-in-strata-insurance-and-how-theyre-costing-you/
