Consumer Advocates Urge NSW Government to Hold Firm on Strata Commission Ban

The Owners Corporation Network (OCN) and Australian Consumers Insurance Lobby Inc. (ACIL) have issued a joint call for the NSW Government to stay the course on banning strata insurance commissions, warning that to backtrack now would set a dangerous precedent and reward years of unethical industry conduct.

The call comes in response to a recent industry commentary raising concerns that the reforms could threaten industry stability. But consumer advocates say those concerns are being overblown by vested interests seeking to delay or dilute long-overdue reform.

The proposed ban is not about destroying an industry – it is about ending a culture of conflicted payments and replacing it with one that rewards transparency and integrity. Businesses that already operate without commissions will no longer be undercut by those profiting through hidden fees and conflicted relationships. This reform will finally create a level playing field where lot owners can make informed decisions and ethical businesses are not penalised for doing the right thing.

Karen Stiles, Policy Director of OCN, said:

“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. The proposed ban on commissions is a vital step toward restoring integrity in the system. We cannot allow commercial interests to undermine consumer protections.”

Tyrone Shandiman, Chairperson of ACIL, added:

“The problems in strata insurance are not isolated incidents – they’re the result of systemic, unethical behaviour that has gone unchecked for too long. There must be consequences. If an industry can profit through poor conduct and then lobby its way out of reform, it sends the message that the risk was worth it. That cannot be the legacy of this Government’s reform agenda.”

The organisations also cautioned against relying on industry-driven surveys and commentary that may distort the true picture of consumer harm.

“We urge the Government to listen to the voices of lot owners, not just those profiting from the status quo,” Stiles said. “This is a once-in-a-generation opportunity to build a fairer system. The Government must follow through.

Self-Regulation is Failing – Time for Government to Take Over the Insurance Code

The Australian Consumers Insurance Lobby (ACIL) has slammed the Insurance Council of Australia’s (ICA) response to the General Insurance Code of Practice review, stating that self-regulation in the insurance industry is failing consumers. With insurers cherry-picking recommendations and refusing to adopt key reforms from its own independent reviews and government inquiries, ACIL believes the government must now consider taking control of the Code.

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ACIL Code of Practice (Self Regulation is Failing) Final.pdf

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“The blatant disregard for independent review recommendations and findings from government inquiries is yet another example of the industry behaving poorly,” said Tyrone Shandiman, Chair of ACIL. “The insurance industry should not be dictated to by insurers—it must work for consumers.”

ACIL has highlighted three critical areas where the industry response is inadequate and harmful to policyholders:

• Expert Reports – Insurers continue to rely on biased expert reports to deny claims, yet there is no clear timeline for finalising the Use of Expert Reports: Industry Best Practice Standard. Without enforceable rules, insurers will continue using conflicted experts to support claim denials.

• Cash Settlements – Insurers have sidestepped recommendations to ensure fairer cash settlements, leaving consumers at risk of underpaid claims that fail to cover the true cost of repairs.

• Vulnerability Protections – While insurers claim to support a Vulnerability Framework, there is no clear timeline for completion or commitment to enforceable obligations. This leaves vulnerable consumers at risk of inadequate support when they need it most.

In addition to these critical issues, insurers continue pricing practices that are detrimental to consumers (C-89 & C-88), including charging more for instalment payments and offering higher renewal quotes than those available to new customers.  They have rejected calls to guarantee temporary accommodation until claims are finalised (PFI-10 & C-69), refused to offer fairer premiums during claims delays (PFI-60), and opposed flexibility in rebuilds (PFI-26) despite pushing for $30b of government resilience funding. Insurers also refuse to make the Code contractually enforceable (PFI-47), weakening accountability.

Despite rejecting these critical reforms, insurers now want ASIC to sign off on the Code of Practice, despite failing to implement key recommendations. “How can ASIC endorse a Code where insurers have ignored their own independent recommendations without a rigorous process to justify these decisions?” said Shandiman.

ACIL is urging the Insurance Council of Australia to reconsider its response and commit to meaningful reforms. “If insurers refuse to act in the interests of consumers, we will actively lobby for a government takeover of the Code to ensure policyholders receive the fairness and protection they deserve,” Shandiman said.

Assurances Needed: Will Northern Australians Be Left Paying for Cyclone Claims in the South?

The Australian Consumers Insurance Lobby (ACIL) is calling on the Federal Government to provide assurances that Northern Australian residents and small businesses will not be left subsidising cyclone claims in southern parts of Australia under the Cyclone Reinsurance Pool.

The projected path of Cyclone Alfred—while ultimately causing less damage than expected—highlighted major flaws in the current modelling. There is a real risk that Northern Australians, the very people the pool was designed to assist, could be paying the price for a major cyclone event in Brisbane or even further south.

Interdecadal Pacific Oscillation (IPO) and Shifting Cyclone Risks

A key concern is whether the government has properly accounted for changes in cyclone risk patterns. Scientists believe that the Interdecadal Pacific Oscillation (IPO)—a climate cycle that operates over 15 to 30 years—may have shifted back into a negative phase around 2020–2022.

Historical data shows that the last prolonged negative IPO phase (1947–1976) coincided with increased cyclone activity in Southern Queensland and New South Wales, with at least one cyclone reaching Sydney. However, when the Cyclone Reinsurance Pool premium rates were set in 2022, Australia was not in a confirmed negative IPO phase.

ACIL is concerned that the current modelling may not reflect the increased likelihood of cyclones affecting southern regions, and Northern Australians could be left carrying the financial burden of claims from areas that were not originally factored into the pool’s risk profile.

No Cover Instead of Free Cover

Adding to these concerns, residents south of Port Macquarie do not contribute to the pool, yet they receive free cover. Cyclones have historically impacted areas beyond Port Macquarie, and there is a real risk that a major cyclone event further south would see Northern Australians unfairly footing the bill.

ACIL is calling on the government to urgently review the structure of the pool to ensure that:

• Regions with cyclone risk contribute fairly to the pool, rather than some receiving free cover at the expense of others.

• Alternatively, regions deemed to have a zero chance of cyclone impact should be excluded from the pool entirely, ensuring that only those who are contributing receive protection.

Government Must Provide Assurances on Premium Equity

“The Cyclone Reinsurance Pool was meant to improve affordability for Northern Australians, but there is a growing risk that they could end up paying for cyclones in the south,” said Tyrone Shandiman, Chairperson of ACIL.

“We are seeking urgent assurances from the Assistant Treasurer, Stephen Jones, that Northern Australians will not be left subsidising cyclone claims from other parts of the country. The government must ensure the pool operates fairly, with equitable premium contributions and long-term climate factors properly accounted for.”

ACIL urges the Federal Government to immediately review the pool’s modelling and pricing structures before Northern policyholders find themselves paying for a system that was meant to help them.