Standard templates proposed for strata transparency
Standard templates that contain a minimum set of eight items should be introduced to improve strata insurance disclosure, with existing practices in many cases opaque or incomplete, an independent report completed by consultant John Trowbridge says.
The report, which marks the first phase of a three-phase review, also proposes increased transparency on the scope of services offered by strata managers and brokers as well as around commercial relationships.
“Disclosure and its transparency must be addressed irrespective of any possible reforms to strata insurance remuneration or other intermediary practices,” Mr Trowbridge says in the report.
“It is an essential precursor to considering possible remuneration reforms and to exploring affordability and availability of strata insurance.”
The report proposes that Strata Community Association (SCA) and the National Insurance Brokers Association (NIBA) should establish guidance notes or practices standards in self-regulatory responses to the recommendations.
NIBA CEO Phil Kewin says the core of the recommendations is consistent with the group’s approach to transparency through the new brokers code of practice, and the role of brokers and strata managers and how they are remunerated needs to be clear.
“NIBA supports transparency, and while we will not be mandating a templated approach, we will include the template in our implementation guide which accompanies the insurance brokers code of practice,” he said.
Strata Community Association (SCA) National President Chris Duggan says getting strata insurance right for the industry and consumers is a priority and any report or analysis that advances that goal is welcome.
“We will work with everyone we can to increase consumer understanding of strata insurance,” he told insuranceNEWS.com.au.
“We welcome many of John’s recommendations, including the introduction of standardised templates, improved timing of documentation delivery to strata committees and a minimum set of financial items to be disclosed.”
Mr Duggan says in almost every jurisdiction in Australia strata managers are required by law to disclose details about strata policies, and managers “through SCA’s professional standards often go beyond those requirements”.
