Consumer groups walk away from NIBA Code consultation, call for ASIC to lead reform

The Australian Consumers Insurance Lobby (ACIL), Owners Corporation Network (OCN) and the Unit Owners Association of Queensland (UOAQ) say the draft NIBA Code of Practice demonstrates that meaningful reform of the strata insurance sector will not come through industry self-regulation.

Following years of engagement, detailed submissions and participation in NIBA's independent Code review, the three organisations say the incremental improvements to the draft Code fail to address the structural conflicts of interest that have undermined confidence in the strata insurance market.

A detailed comparison of the consumer groups' recommendations against the draft Code is below:

NIBA Draft Code Failing.pdf

Download PDF • 2.31MB

It demonstrates that the Code falls well short of addressing the conflicts of interest, governance issues and professional standards that have been raised repeatedly in the public arena over recent years.

Tyrone Shandiman, Chair of the Australian Consumers Insurance Lobby, said:

"For years we've engaged with NIBA in good faith. We've prepared detailed submissions, attended consultations, responded to independent reviews and provided practical solutions. This draft tells us everything we need to know about the industry's appetite for genuine reform."

"Consumer organisations have limited time and limited resources. Our efforts will now be focused, through ASIC and government. If NIBA decides it genuinely wants to revisit these issues, it knows how to reach us."

David Glover, Co-Managing Director of the Owners Corporation Network, said:

“Just this week the Insurance Brokers Code Compliance Committee reported that a review of seven brokers resulted in nine breaches being issued, two brokers being referred to ASIC, and one to NSW Fair Trading.”

"A professional code should lead the industry. It should set higher standards than the law and give consumers confidence that difficult issues are being addressed."

"Instead, we've seen superficial tinkering while the key issues that have undermined trust in the strata insurance sector aren’t even touched. Consumers deserve a Code that addresses the causes of distrust, not just its symptoms."

Mike Murray, President of the Unit Owners Association of Queensland, said:

"For strata owners, this draft sends a disappointing message. Owners have been looking for stronger leadership on professionalism, transparency and conflicts of interest"

"Confidence in industry self-regulation depends on industry being willing to tackle difficult issues. This draft does not give strata owners that confidence."

Consultation concluded

ACIL, OCN and UOAQ said they do not presently intend to continue engaging in the Code development process beyond their formal consultation response. However, they will now prioritise engagement with ASIC and government to pursue stronger regulatory protections for strata consumers.