SCA releases industry’s first strata insurance guideline
SCA releases industry’s first strata insurance guideline | Insurance Business Australia
Insurance News
SCA releases industry’s first strata insurance guideline
Insurance experts notes new guideline addresses key findings in his paper
Insurance News
By
Jonalyn Cueto
The key strata management body has released the industry’s first Strata Insurance Disclosure Best Practice Guideline to improve strata insurance practices and outcomes for its members as well as strata insurance consumers.
In a news release, the Strata Community Association (SCA) said the new guideline outlines the industry’s process in three steps: disclose, document, and communicate. It has described the guideline as a “critical piece” in understanding the support available.
“The SCA Best Practice Strata Insurance Disclosure Guide introduces a new practice standard for SCA
members that has higher disclosure thresholds than all existing state, territory and federal legislation and regulation,” the news release said. “The best practice guide is aiming to achieve these new and higher levels of disclosure through several concepts and inclusions in the strata insurance process.”
The new guideline include the following:
Eight financial items in quotations and invoices
Discussion on the three-step process – disclose, document, communicate
Templates to achieve standardisation of information presented to strata committees
Communications principles, processes and timeframes for communication between all parties as well as communication with consumers
Disclosure of commissions, conflicts of interest and the allocation of remuneration between parties
Giving clarity to procedures and support available
Chris Duggan, president of SCA Australasia, said the new guidelines would address concerns on transparency and provide clarity on the strata insurance industry. Duggan said the guidelines are the product of many consultations with key players in the industry, including underwriters, brokers, software providers, and strata management firms.
“We are implementing a system that ensures that practices are transparent, and consumers are provided with enough information to make informed choices,” he said. “The insurance services provided by strata managers, brokers and underwriters is not always simple and straightforward, but their interaction is critical to achieve positive outcomes, and will only be improved by the introduction of this guide.
“We want to elevate SCA members in the eyes of strata committees and consumers, and eliminate some of the poor practices and bad actors who undermine confidence, and improve relationships between strata managers, committees and consumers.”
The new guideline was created to address key findings of two research reports, Dr Nicole Johnston’s report, A data driven, holistic understanding of strata insurance and insurance expert John Trowbridge’s paper Independent Review of Strata Insurance Practices – Phase 1, the news release said.
Trowbridge congratulated the SCA on the release of the new guideline. “This work is testament to the SCA’s commitment to do so following release of my Phase 1 paper on disclosure last year and is a significant enhancement of the SCA’s approach to self-regulation on behalf of its members,” he said. “The content of this Best Practice Guide follows closely the recommendations in my paper regarding transparent disclosure of strata managers’ own remuneration and that of brokers they use. It is explicit about three important principles for strata managers to apply, namely disclose, document, communicate.
“These steps are rightly aimed at obliging strata managers to go beyond the written word to assist actively in improving the understanding and education of strata managers, their body corporate clients and brokers.”
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