LEICHHARDT MP Warren Entsch hasn’t ruled out the possibility of a catastrophe reinsurance pool or a mutual to address the north’s insurance challenges, despite the final report of the Northern Australian Insurance Premiums Taskforce focusing on mitigation.
“I’m glad the report has now been released, we’ve been waiting for it to be made public so that we can start talking about the findings,” Mr Entsch said today.
“The report is very comprehensive and includes a lot of useful information moving forward, but in my personal view there’s too much focus on mitigation which is the ‘easy way out’ for the insurance companies.
“I still believe that some model of catastrophe reinsurance is probably the better way to go, but we can’t forget that there are responsibilities from other sectors too.
“The State Government has an obligation to look at its strata legislation, issues such as the requirement for body corporates to insure buildings for full replacement value rather than market value.
“It’s also the State Government that imposes stamp duty, which is basically a tax on a tax and highly inefficient.
“Then there’s the insurance companies themselves after an event, they bring in their own assessors and use contractors from outside the region, which are all multipliers to the inflated rebuilding costs.
“The insurance companies also say the biggest cost from an event is in the many small claims for damage caused by outdoor furniture, shade sails and fallen trees.
“Maybe insurers could offer a policy where they don’t cover damage caused by these items, and reductions in premium pricing should reflect the fact that insurance companies are claiming this is a major impost.
“That’s a form of mitigation without subsidising the insurance companies’ profits and at no cost to government.”
Mr Entsch said he had met with Assistant Treasurer Kelly O’Dwyer and Treasury officials in Canberra yesterday, and would continue to work with them on solutions.
“I’ll certainly be putting forward come comments on the report, and I’m pleased that we have some concrete information now and don’t need to keep researching the issues.
“I do suspect the Insurance Council of Australia has used some rubbery figures in their submission, which need further verification though.”
Mr Entsch said he would continue to lobby hard for the reinsurance pool or a mutual, and had made it quite clear that reductions in premiums of 10 or 20 per cent cannot be considered ‘a win’.
“I’d particularly like to commend the very good work of the Taskforce and the Reference Panel, particularly Margaret Shaw who is the North Queensland consumer advocate she is a wealth of knowledge and support on this issue and I thank her very much for her efforts.”