The floods of 2010-11 were a devastating blow to many
communities with lives lost and homes and property destroyed. In the aftermath,
the tragedy and devastation was made worse when many people found that they
were under insured or their insurance policies did not provide cover. In many
cases, people thought they were insured only to be advised that their policies
did not provide for the types of floods that occurred. The discovery that homes
were not adequately insured against the floods was devastating for families.
The Insurance Contracts Amendment Bill 2011 is part of suite
of measures to address issues associated with flooding. The Bill is a technical
piece of legislation which introduces, through schedule 1, a standard
definition of flood and, through schedule 2, a Key Facts Sheet (KFS).
Both the standard definition of flood and the KFS are widely
supported by both Industry and consumer groups. It is clear that consumer
groups have wanted these measures and industry groups support them. The
National Insurance Brokers Association (NIBA), RACQ Insurance, the Insurance
Council of Australia, and the Consumer Action Law Centre all indicated that
they support both measures.
The Bill provides the framework for the introduction of the
standard definition and the KFS. Once the Bill is passed the regulations
prescribing the standards definition and the KFS will be introduced.
The Treasury has issued draft regulations on the standard
definition and will soon issue a discussion paper on the KFS. The committee’s
roundtable public hearing provided a constructive forum to gauge the adequacy
of Treasury’s performance in consulting on the standard definition and the KFS.
The committee is reassured by the constructive dialogue between the Treasury,
industry groups and consumer groups and believes that the technical points
raised during the hearing can be successfully dealt with as the regulations are
The committee concludes that the Insurance Contracts
Amendment Bill 2011 is an important piece of legislation that should be passed.
I would like to thank the organisations that assisted the
committee during the inquiry through submissions or participating in the
hearing in Canberra. I also thank my colleagues on the committee for their
contribution to the report.
Julie Owens MP
Terms of reference
On 24 November 2011 the Selection Committee requested the
Committee to inquire into and report on the Insurance Contracts Bill 2011.
Under Standing Order 222(e), the House is taken to have
adopted the Selection Committee’s reports when they are presented.