On 22 November 2016, the Senate referred an inquiry into Australia’s general insurance industry to the Senate Economics References Committee for inquiry and report. See here for details.

The terms of reference for the inquiry were:

  • the increase in the cost of home, strata and car insurance cover over the past decade in comparison to wage growth over the same period;
  • competition in Australia’s $28 billion home, strata and car insurance industries;
  • transparency in Australia’s home, strata and car insurance industries;
  • the effect in other jurisdictions of independent home, strata and car insurance comparison services on insurance cover costs;
  • the costs and benefits associated with the establishment of an independent home, strata and car insurance comparison service in Australia;
  • legislative and other changes necessary to facilitate an independent home, strata and car insurance comparison service in Australia; and
  • any related matters.

The Report titled “Australia’s general insurance industry: sapping consumers of the will to compare” was released on 10 August 2017 and recommended that the Government (or other entity as specified below) do the following:

  • Recommendation 1 – release its response to the final report of the Northern Australia Insurance Premiums Taskforce.


  • Recommendation 2 – conduct a review into competition in the strata insurance market in North Queensland to establish a fact base and explore avenues to improve insurer participation in this region.


  • Recommendation 3 – strengthen the transparency of general insurance pricing by amending the product disclosure regime in the Corporations Act 2001 to require insurers to:
    • disclose the previous year’s premium on insurance renewal notices; and
    • explain premium increases when a request is received from a policyholder.
  • Recommendation 4 – initiate a review of component pricing to establish a framework for amending the Corporations Act 2001 to provide component pricing of premiums to policyholders upon them taking out or renewing an insurance policy, as well as an assessment of the benefits and risks to making such a change.


  • Recommendation 5 – initiate an independent review of the current standard cover regime with particular regard to the efficacy of current disclosure requirements.


  • Recommendation 6 – work closely with industry and consumer groups to develop and implement standardised definitions of key terms for general insurance.


  • Recommendation 7 – undertake a review of the utility of Key Facts Sheets as a means of product disclosure, with particular regard to the:
    • effectiveness of Key Facts Sheets in improving consumer understanding of home building and contents policies; and
    • merit of extending the use of Key Facts Sheets to other forms of general insurance.
  • Recommendation 8 – complete a detailed proposal for a comparison tool for home and car insurance, consistent with the proposal made in the FSI Interim Report and similar to the structure of the Irish model. The proposal should include a detailed evaluation of the international evidence base of the costs and benefits of comparison services on consumer outcomes, as well as the likely benefits in the Australian context.


  • Recommendation 9 – the Australian Securities and Investments Commission undertake a comprehensive review of the efficacy of the North Queensland home insurance website.


  • Recommendation 10 – consider introducing legislation to mandate compliance with the ACCC’s good practice guidance for comparison website operators and suppliers.


  • Recommendation 11 – introduce the legislative changes required to remove the exemption for general insurers to unfair contract terms laws.


  • Recommendation 12 – strongly consider introducing legislation to require all insurance intermediaries disclose component pricing, including commissions payable to strata managers, on strata insurance quotations.


  • Recommendation 13 – state and territory governments strengthen disclosure requirements in relation to the payment of commissions to strata managers.


  • Recommendation 14 – reconsider its response to the Productivity Commission’s inquiry on National Disaster Funding Arrangements.


  • Recommendation 15 – work with states and territories through the Council of Australian Governments to reform national disaster funding arrangements.



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