The Morrison Government will further ease cost of living pressures for Far North Queenslanders after legislation to establish the reinsurance pool for cyclone and related flood damage passed parliament.
More than 880,000 residential, strata and small business property insurance policies across Northern Australia are expected to be covered for the risk of cyclone and related flood damage through the establishment of the reinsurance pool.
The reinsurance pool will be backed by a $10 billion annually reinstated Commonwealth Government guarantee and will be administered by the Australian Reinsurance Pool Corporation.
The reinsurance pool will come into effect from July 1, 2022.
Far North Queensland homeowners are expected to see premium discounts of up to 46 per cent, strata properties up to a 58 per cent and small and medium-sized business up to a 34 per cent.
Coverage for small business marine property insurance policies will be further developed and included from July 1, 2023.
Federal Leichhardt MP Warren Entsch said by passing this critical legislation he had delivered on his promise to ensure Far North Queenslanders had access affordable insurance.
He said the scheme would be reviewed annually and any necessary changes made to ensure it is delivering premium reductions for Far North Queenslanders.
“This has been a very long journey for me personally and I have copped a lot of criticism over the years but at the end of the day I have delivered for Far North Queenslanders,” Mr Entsch said.
“The reinsurance pool will drive down insurance prices, put more money in people’s pocket and give Far North Queenslanders the ability to actually insure their home, unit or business.
“The reinsurance pool will be mandatory for insurers participate in, with an 18-month transition period for large insurers and an additional 12-months for small insurers.
“Mandatory participation will ensure the reinsurance pool provides the greatest possible reduction in premiums.”
Mr Entsch said the reinsurance pool was an absolute game changer for families and businesses in Cairns and Far North Queensland.
“The high cost of insurance has been absolutely crippling to so many Far North Queensland households and businesses,” he said.
“The Morrison Government has listened, acted and has delivered real outcomes for Far North Queenslanders.”
The Morrison Government will provide $18.4 million over five years to the Australian Competition and Consumer Commission to monitor the premiums of insurance policies covered by the reinsurance pool to ensure it is delivering for Northern Australia.
The ACCC will also collect data to evaluate the impact of the reinsurance pool and assess whether the savings from the reinsurance pool are being passed through to policyholders.
