ACIL urges probe into misconduct in strata insurance appointments

ACIL urges probe into misconduct in strata insurance appointments | Insurance Business Australia

Insurance News

ACIL urges probe into misconduct in strata insurance appointments

Regulators should launch industry-wide inquiry into “disturbing trend,” says group

Insurance News

By
Mika Pangilinan

The Australian Consumer Insurance Lobby (ACIL) has called for a regulatory investigation into what it describes as widespread misconduct in the appointment of insurance brokers for strata insurance policies.

In an emailed release, the consumer advocacy group said it has reported 146 cases of alleged misconduct to the Australian Securities and Investments Commission (ASIC) and the Australian Competition & Consumer Commission (ACCC).

According to ACIL, these cases point to a “disturbing trend” where strata managers would financially benefit from transferring insurance policies to certain brokers.

These brokers would, in turn, charge excessive fees and commissions without obtaining the necessary approval from insured parties, ACIL added.

Based on its findings, ACIL said such schemes have led to consumer losses surpassing $240 million.

The group also called on ASIC and ACCC to consider a wider investigation across the industry.

“It is ACIL’s stance that such a comprehensive inquiry will uncover widespread instances of unlawful activities perpetrated by strata managers in the arrangement of insurance, underscoring the need for immediate and decisive regulatory action,” the group said.

Along with its calls for a regulatory investigation, ACIL has published an educational video aimed at raising awareness about these issues and their impact on consumers.