Let the Market Decide: CEO Responds to Proposal to Ban Strata Insurance Commissions

A Senate Committee has been told that the government should not ban strata insurance commissions outright but let the market decide how body corporates are compensated. This comes after the chair of the Australian Competition and Consumer Commission (ACCC) proposed to ban commissions in the strata insurance market in September in response to a report by ABC’s Four Corners program. The report alleged that the insurance broker network Steadfast Group had run a scheme to provide kickbacks to strata managers without property owners’ knowledge, thus inflating insurance policy prices. Typically, insurance providers for body corporates (apartment units, or townhouses) will pay commissions to strata managers or brokers. This figure can be about 20 percent of the insurance premium (pdf)....