Consumer and Owner Groups: PICA’s Threat Undermines Confidence in Industry Reform

The Australian Consumers Insurance Lobby (ACIL) and the Owners Corporation Network of Australia (OCN) are calling on the New South Wales Government to press ahead with reforms to ban insurance commissions in strata management, following reports that foreign-owned PICA Group has threatened to cancel its membership with the Strata Community Association (SCA) New South Wales (refer article Strata group rebels against SCA reform).

The organisations say the move by PICA — Australia’s largest strata management company — undermines confidence in the industry’s ability to deliver transparency and reform from within.

PICA’s recent media statement includes obvious fear-mongering, suggesting that consumers are not already paying insurers’ costs through their premiums.

“When the largest strata manager in the country threatens to withdraw from its own professional body over transparency measures, it sends the wrong message to consumers, regulators and policymakers,” the groups said in a joint statement. “It highlights why government leadership on this issue is essential.”

ACIL and OCN support SCA’s efforts to raise professional standards and rebuild public trust through reforms focused on transparency, ethical conduct and accountability. While some fine-tuning will be needed to eradicate all conflicted remuneration, the direction is positive for consumers.

“The SCA has shown leadership in moving the industry toward higher standards. Those efforts deserve recognition and support — not resistance from those who benefit from opaque practices,” the statement said.

The groups note there is mounting evidence of malpractice in the handling of strata insurance commissions, and that their organisations are aware of cases being investigated by regulators.

“The practice of fiduciaries taking commissions on essential insurance products has no place in a modern, professional industry,” the statement continued. “It’s a practice that has eroded trust for years and must be brought to an end.”

ACIL and OCN urged the NSW Government and the NSW Strata and Property Services Commissioner to press ahead with banning commissions and ensure reforms that permanently remove conflicts of interest in strata insurance arrangements.

“The SCA needs more members who back transparency and professionalism,” the statement concluded. “If PICA no longer supports that direction, now is the time for other strata managers to step up and fill its shoes — and show consumers that integrity and accountability truly matter.”