Hon
Stephen Jones MP,
Assistant Treasurer and
Minister for Financial Services,
media
release,
3
August
2023:
Insurance
claims handling under the microscope in parliamentary inquiry into
insurer responses to the 2022 floods
Today,
the Assistant Treasurer will give notice to the House of
Representatives tabling a motion to establish a Parliamentary Inquiry
into insurer responses to the 2022 floods. The motion will be
presented to the house on the next day of sitting, Monday 7 August.
The
inquiry will take a whole of economy view of the ongoing challenges
faced by intense and frequent flood events.
It
is consumer focussed - investigating land use planning, affordability
of coverage, supply chain issues, labour shortages, claims handling,
and dispute resolution processes.
The
February-March 2022 floods in South‑East Queensland and NSW are
the costliest natural disaster for insurance costs, totalling around
$5.87 billion, in Australian history.
The
Assistant Treasurer has visited the communities impacted by floods in
Southeast Queensland with Graham Perrett MP and the Northern Rivers
with Janelle Saffin MP; and following a visit to flood ravaged towns
in Central West NSW last month announced the inquiry alongside Member
for Calare, Andrew Gee MP.
Today,
the Albanese Government has released the terms of reference.
The
committee will hear directly from affected communities, holding
public hearings across the country in regions affected by the 2022
floods. A final report will be handed down during the third quarter
of 2024.
The
Inquiry will inform the Albanese Government’s broader program of
work to address insurance access and affordability. This includes up
to $1 billion over five years from 2023-24 (up to $200 million per
year) to invest in measures that better protect homes and communities
from extreme weather through the flagship Disaster Ready Fund.
The
Government is taking proactive steps to mitigate disaster risk and
build climate resilient communities. Currently, 97% of disaster
funding is going toward recovery and only 3% toward risk mitigation.
We want to flip that on its head.
The
terms of reference for the inquiry are below.
The
Standing Committee on Economics for inquiry and report by quarter 3,
2024:
1.
response of insurers to the claims resulting from major 2022 floods,
including:
(i)
south-east Queensland and northern New South Wales (NSW) floods of
February and March 2022;
(ii)
Hunter and greater Sydney floods of July 2022;
(iii)Victorian,
NSW and Tasmanian floods of October 2022; and
(iv)
central west NSW floods of November and December 2022;
2.
the inquiry shall have regard to the following matters in respect of
the aforementioned floods
(i)
the experiences of policyholders before, during and after making
claims;
(ii)
the different types of insurance contracts offered by insurers and
held by policy holders;
(iii)
timeframes for resolving claims;
(iv)
obstacles to resolving claims, including factors internal to insurers
and external, such as access to disaster hit regions, temporary
accommodation, labour market conditions and supply chains;
(v)
insurer communication with policyholders;
(vi)
accessibility and affordability of hydrology reports and assessments
to policy holders;
(vii)
affordability of insurance coverage to policy holders;
(viii)
claimants’ and insurers’ experience of internal dispute
resolution processes; and
(ix)
the impact of land use planning decisions and disaster mitigation
efforts on the availability and affordability of insurance.
3.
the inquiry shall also have regard to insurer preparedness for future
flood events
4.
the inquiry will take into consideration findings from other reports
such as Deloitte’s external review of insurers’ responses to the
2022 floods, and ASICs Claims Handling review.
The House of Representatives agreed to the creation of this inquiry on the afternoon of Monday 7 August 2023.
