The Morrison Government welcomes the release of the Australian Competition & Consumer Commission's (ACCC) first interim report into the supply of residential building, contents and strata insurance in Northern Australia.
This is the first report of a multi-year investigation beginning in July 2017 into the affordability and availability of insurance in Northern Australia by the ACCC.
The report has found that home contents and strata premiums are higher in northern Australia than the rest of Australia partly because insurer costs in Northern Australia are higher and because of a lack of strong price competition between insurers.
The ACCC also found people find it difficult to compare products, there are longstanding conflicts of interest, and the settlement of claims is an ongoing challenge for customers.
The first interim report includes 15 initial recommendations, including:
- abolishing stamp duty on insurance products;
- revising standard cover for insurance products and extending standard definitions;
- improving how information is disclosure to consumers.
- prohibiting conflicted remuneration for insurance brokers; and
- improving building codes.
The Government is considering its response to these recommendations alongside other existing reports and inquiries, such as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and the Governments response to the Productivity Commission's report into Competition in the Australian Financial System.
The first interim report also outlines a number of focus areas for its work in 2019, including consultation on 13 additional recommendations, undertaking detailed case studies, examining premium adjustments and barriers to entry.
The ACCC will submit its next interim report to the Treasurer by 30 November 2019. The inquiry is to be completed and a final report submitted to the Treasurer by 30 November 2020.