INQ187

TitleLong
Inquiry into flood insurance and related matters. Natural Disaster Insurance Review. (Federal)
Year
InquiryType
DisasterType
State
Status

Recommendations for this Inquiry

INQ-ref REC-UID CODE SubCode SrcNUM Recommendation
INQ187 REC187-2968 D - Recovery 6 - Insurance and legal liability Recommendation 51

That the Government give priority to introducing legislation necessary to ensure that all home, contents and home unit insurance policies include flood cover and to establish a new national agency for flood risk management and flood reinsurance purposes.

INQ187 REC187-2954 D - Recovery 6 - Insurance and legal liability Recommendation 37

That subsection 35(2) of the Insurance Contracts Act 1984 be amended so that policyholders are not deemed to be clearly informed of a deviation from ‘standard cover’ by simply being provided a copy of the insurance policy or product disclosure statement.

INQ187 REC187-2953 D - Recovery 6 - Insurance and legal liability Recommendation 36

That all home building insurance policies providing sum insured cover be modified by the end of 2014 so as to include replacement value cover in the event of total loss of the home.

INQ187 REC187-2952 D - Recovery 6 - Insurance and legal liability Recommendation 35

That lending institutions remind mortgagors annually of their obligations to hold home insurance and of the risks of under-insurance in order to minimise non-insurance and under-insurance of homes.

INQ187 REC187-2951 D - Recovery 6 - Insurance and legal liability Recommendation 34

That access to insurance be enhanced through the development of alternative payment options, in particular:
• by the Commonwealth Government arranging for Centrelink customers to be able to pay insurance premiums fortnightly through Centrepay; and

INQ187 REC187-2950 D - Recovery 6 - Insurance and legal liability Recommendation 33

That the Commonwealth engage with the insurance industry and the States and Territories in planning for the future coordination of charitable and government payments to individuals to assist with recovery after future natural disasters.

INQ187 REC187-2949 D - Recovery 6 - Insurance and legal liability Recommendation 32

That all home, contents and home unit insurance policies cover the policyholder for storm surge, tsunami and landslide, where the storm surge, tsunami or landslide is the result of another event that is covered under the policy and regardless of whether the insured property directly suffers damag

INQ187 REC187-2948 D - Recovery 6 - Insurance and legal liability Recommendation 31

That:

INQ187 REC187-2947 D - Recovery 6 - Insurance and legal liability Recommendation 30

That the Agency charge insurers a small administrative fee for each policy ceded to the reinsurance facility. 

INQ187 REC187-2946 A - Responsibility 21 - Role of Commonwealth Government Recommendation 29

That a national agency sponsored by the Commonwealth Government be established to undertake national coordination of flood risk management and to operate the system of premium discounts and the flood risk reinsurance facility. The Agency would:

INQ187 REC187-2945 D - Recovery 6 - Insurance and legal liability Recommendation 28

That to facilitate flood risk information being made publicly available, Commonwealth, State and Territory governments grant indemnities to the providers of flood risk information if the information is obtained and provided in good faith and in the absence of any gross negligence.

INQ187 REC187-2955 D - Recovery 6 - Insurance and legal liability Recommendation 38

That, in endorsing the Government proposal for a Key Facts Statement, the Key Facts Statement list replacement cover and all natural disaster events, identified as ‘standard cover’ in the Insurance Contracts Regulations 1985.

INQ187 REC187-2956 D - Recovery 6 - Insurance and legal liability Recommendation 39

That a ‘health warning’ be provided by insurers to the purchasers of home and contents policies that do not include full flood cover or full replacement cover. The health warning should be provided:
• in the Key Facts Statement;
• verbally at the time of telephone purchase; and

INQ187 REC187-2957 D - Recovery 6 - Insurance and legal liability Recommendation 40

That the Commonwealth Government introduce a standard definition of flood in the form proposed in the ‘Reforming flood insurance: Clearing the waters’ consultation paper.

INQ187 REC187-2967 D - Recovery 6 - Insurance and legal liability Recommendation 50

That the current formula for the cost of rebuilding of State and Territory assets under the Natural Disaster Relief and Recovery Arrangements be changed to expenditure before any insurance recoveries by the State or Territory rather than net of any insurance recoveries.

INQ187 REC187-2966 D - Recovery 6 - Insurance and legal liability Recommendation 49

That the Commonwealth and State governments provide funding for legal advice and assistance with insurance disputes following natural disasters.

INQ187 REC187-2965 D - Recovery 6 - Insurance and legal liability Recommendation 48

That ASIC conduct a review of the General Insurance Code of Practice three years after the amendments recommended to the Code in this Review are implemented, in order to assess the effectiveness of the Code with a view to determining whether an ASIC Regulatory Guide for claims handling should the

INQ187 REC187-2964 D - Recovery 6 - Insurance and legal liability Recommendation 47

That the Insurance Council of Australia amend the General Insurance Code of Practice such that the General Insurance Code Compliance Committee:

INQ187 REC187-2963 D - Recovery 6 - Insurance and legal liability Recommendation 46

That the Insurance Council of Australia amend the General Insurance Code of Practice to require that:

INQ187 REC187-2962 D - Recovery 6 - Insurance and legal liability Recommendation 45

That the Insurance Council of Australia amend clause 4.5 of the General Insurance Code of Practice to extend the time within which claimants in natural disasters have the right to make further claims or lodge reviews after the finalisation of an initial claim to seven months from the date of the

INQ187 REC187-2961 D - Recovery 6 - Insurance and legal liability Recommendation 44

That the Insurance Council of Australia repeal clauses 4.3 and 4.4 of the General Insurance Code of Practice, so that claims arising from natural disasters are subject to the same minimum standards as other claims — including the four month time limit for a determination on liability and the natu

INQ187 REC187-2960 6 - Insurance and legal liability Recommendation 42

That the Insurance Council of Australia amend the Code of Practice to impose a four month time limit (subject to exceptional circumstances) to make a determination as to liability and the nature of the loss or damage with respect to a claim.

INQ187 REC187-2959 6 - Insurance and legal liability Recommendation 42

That every APRA-authorised general insurer adopt and comply with the General Insurance Code of Practice.

INQ187 REC187-2958 6 - Insurance and legal liability Recommendation 41

That, in order to give general insurance policyholders the same legal remedies as other consumers, unfair contract terms laws be applied to general insurance.

INQ187 REC187-2944 6 - Insurance and legal liability Recommendation 27

That the Commonwealth seek reimbursement of some portion of the shortfall from the State or Territory government in whose jurisdiction the flood occurred.

INQ187 REC187-2943 6 - Insurance and legal liability Recommendation 26

That the Commonwealth Government guarantee payment of claims from the reinsurance pool by ensuring that, whenever a funding shortfall occurs in the pool through claims exceeding the funds held in the pool, the Commonwealth would meet the shortfall.

INQ187 REC187-2942 6 - Insurance and legal liability Recommendation 25

That a flood risk reinsurance facility, or reinsurance pool, be established which would have two primary functions:
• to deliver discounts to home, contents and home unit insurance policies for eligible properties; and

INQ187 REC187-2928 6 - Insurance and legal liability Recommendation 11

That there be limitations on the size of the discount available to high-value homes.

INQ187 REC187-2927 6 - Insurance and legal liability Recommendation 10

The levels of the discounts and the phasing out periods be reviewed from time to time.

INQ187 REC187-2926 6 - Insurance and legal liability Recommendation 9

That flood premium discounts be provided for home building insurance for eligible homes:
• the discounts be assessed by reference to an ‘affordability threshold’ for flood premiums;
• only existing homes would be eligible for discounts; and

INQ187 REC187-2925 6 - Insurance and legal liability Recommendation 8

That the following five principles underpin the design of a system of premium discounts:
• premiums should rise with the level of flood risk;
• those whose homes do not face a flood risk should not pay a flood premium;

INQ187 REC187-2924 6 - Insurance and legal liability Recommendation 7

That whenever flood cover is included in home building insurance policies:
• flood-specific sub-limits not apply; and
• any excess that applies to flood cover be commensurate with that applicable to other insured perils.

INQ187 REC187-2923 6 - Insurance and legal liability Recommendation 6

That home building and home contents insurance should not be made compulsory.

INQ187 REC187-2922 6 - Insurance and legal liability Recommendation 5

That all home building insurance policies include flood cover.

INQ187 REC187-2921 6 - Insurance and legal liability Recommendation 4

The Commonwealth Government guarantee the payment of claims by ensuring that, whenever a funding shortfall occurs in the reinsurance facility through claims exceeding the funds held in the facility, the Commonwealth would meet the shortfall and the Commonwealth would seek reimbursement of a porti

INQ187 REC187-2920 6 - Insurance and legal liability Recommendation 3

That a system of premium discounts be introduced in order that most purchasers of home insurance, home contents and home unit insurance policies in areas subject to flood risk be eligible for discounts against the full cost of flood insurance.

INQ187 REC187-2919 6 - Insurance and legal liability Recommendation 2

That all home insurance, home contents and home unit insurance policies include flood cover.

INQ187 REC187-2929 6 - Insurance and legal liability Recommendation 12

That all home unit insurance policies include flood cover, in the same manner as for homes.

INQ187 REC187-2930 6 - Insurance and legal liability Recommendation 13

That flood premium discounts be provided, in the same manner as for homes, to the bodies corporate of eligible properties, and on the same basis as for detached homes.

INQ187 REC187-2931 6 - Insurance and legal liability Recommendation 14

That the definition of a home for the purposes of flood cover and flood premium discounts be any building for which a homeowner purchases a home insurance policy.

INQ187 REC187-2941 6 - Insurance and legal liability Recommendation 24

That homes at high and extreme risk of flood be provided with discounts initially and that they be assessed regularly for mitigation work already undertaken and the potential for further mitigation.

INQ187 REC187-2940 6 - Insurance and legal liability Recommendation 23

That for home contents insurance policies, policyholders pay for that portion of the risk retained by the insurer and pay nothing for the remainder of the risk up to $100,000.

INQ187 REC187-2939 6 - Insurance and legal liability Recommendation 22

That for body corporate insurance policies receiving full discounts, policyholders pay for that portion of the risk retained by the insurer and pay nothing for the remainder of the risk up to $500,000 times the number of units.

INQ187 REC187-2938 6 - Insurance and legal liability Recommendation 21

That for home building insurance policies receiving full discounts, policyholders pay for that portion of the risk retained by the insurer and pay nothing for the remainder of the risk up to $500,000.

INQ187 REC187-2937 6 - Insurance and legal liability Recommendation 20

That flood premium discounts be delivered through a model that requires insurers to retain and price a portion of the risk with the remainder to be ceded to the reinsurance facility at a discounted reinsurance premium.

INQ187 REC187-2936 6 - Insurance and legal liability Recommendation 19

That the questions of flood cover as standard in small business policies and access to discounted premiums for small business policyholders should be revisited once the recommended arrangements for homes, home units and home contents are in place.

INQ187 REC187-2935 6 - Insurance and legal liability Recommendation 18

That flood premium discounts not be provided to small businesses and that the reinsurance facility not offer reinsurance for small businesses.

INQ187 REC187-2934 6 - Insurance and legal liability Recommendation 17

That all insurers offering small business insurance be obliged to include flood cover on an opt-out basis, instead of an opt-in/opt-out basis as at present, in all of their small business package policies.

INQ187 REC187-2933 6 - Insurance and legal liability Recommendation 16

That discounts be provided, in the same manner as for homes, to home contents insurance policies for eligible properties.

INQ187 REC187-2932 6 - Insurance and legal liability Recommendation 15

That all home contents insurance policies include flood cover.