Submissions for the Treasury reinsurance pool consultation paper closed on 18th June 2021. Northern Australia Insurance Lobby Inc (“NAIL”) has outlined the following key objectives it believes Treasury should focus on to effectively design the reinsurance pool:
Consumers in northern Australia should pay no more for their insurance per dollar value insured compared to policy holders in other parts of Australia with similar natural disaster risk, such as bushfires, storm or hail
The reinsurance cost payable by consumers should not attract state government stamp duty, GST or commissions – for example this may be done by charging the reinsurance cost as a levy and not as part of the premium
The eligibility criteria for the reinsurance pool should extend to as many policy holders as possible
Design and pricing should be easy for the Australian Reinsurance Pool Corporation (ARPC) and insurers to implement, and easy for consumers to understand how they can continue to reduce their premiums
The consultation process has brought up some difficult issues Treasury will have to deal with in the design of the reinsurance pool, for example, who might receive the greatest benefit from the reinsurance pool and how small business is defined.
In addition to our key priorities, NAIL believes the below items should be tabled for discussion:
A portion of reinsurance premiums collected should fund mitigation measures
Risk assessment should be done on any type of property at the request of the owner, with proper dispute resolution process
The reinsurance pool should be expanded to cover a broader range of events or all catastrophe events in the future
To view NAIL’s full submission to the Treasury-led Taskforce follow the below link:
For more information about this media release, contact Tyrone Shandiman on 07 3899 5129 or Margaret Shaw OAM via email info@nail.org.au.