The Morrison Government has released draft legislation on the reinsurance pool for cyclones and related flood damage.
This is the next step in delivering the Morrison Government’s commitment to establishing a reinsurance pool that will support and protect hardworking people in Northern Australia.
Federal Leichhardt MP Warren Entsch said the government had listened to Far North Queenslanders and is taking strong and decisive action to help reduce their insurance costs.
He said following the public consultation period, legislation would be introduced into parliament in the first sitting weeks of 2022.
“The pool will improve the accessibility and affordability of insurance for households and small businesses in cyclone-prone areas across Australia,” Mr Entsch said.
“It is also expected to increase insurer participation in the Northern Australian market, increasing competition and putting further downward pressure on premiums.”
Mr Entsch said the reinsurance pool will be backed by a $10 billion government guarantee and commence on 1 July 2022 for residential, strata, and small business property insurance policies.
He said coverage for small business marine property insurance policies would be further developed and included from 1 July 2023.
“The reinsurance pool will be mandatory for insurers with eligible risks to participate in, with an 18-month transition period for large insurers and an additional 12 months for small insurers,” he said.
“Mandatory participation will ensure the reinsurance pool provides the greatest possible reduction in premiums.”
Mr Entsch said this is an absolute game changer for families and businesses in Cairns and Far North Queensland.
He said it was anticipated more than 500,000 residential, strata and small business property insurance policies in Northern Australia are expected to be eligible to be covered by the reinsurance pool.
“The high cost of insurance has been absolutely crippling to so many households and businesses,” he said.
“The Morrison Government has listened, acted and is going to deliver real outcomes for Far North Queenslanders.
“It is a shame that Anthony Albanese, his hand-picked local candidate and his underperforming local Senator have only been interested petty political games instead of being part of the comprehensive community process undertaken to date to deliver real outcomes for Far North Queenslanders.
“The question now is, do they support lower insurance prices for hardworking Cairns and Far North Queensland families and business owners, or do they want to see families and businesses continue to be slugged in the hip pocket?”
“However, if they want to continue to play politics and criticise our plan, I really look forward to them sharing their solution with the community.”
To ensure the reinsurance pool is delivering for northern Australia, 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 pool from 2022.
The ACCC will 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.
Further information about the reinsurance pool, including factsheets and how to make a submission, can be found here bit.ly/3ojcxB0