The Morrison Government has finalised the design of the reinsurance pool for cyclone and related flood damage, following consultation on the draft legislation.
The reinsurance pool will be backed by a $10 billion annually reinstated Commonwealth guarantee and be administered by the Australian Reinsurance Pool Corporation from 1 July 2022.
Federal Member for Durack, the Hon. Melissa Price says after a long consultation process and hard work to get the right model, I very much welcome the Morrison Government’s plan to introduce legislation for the reinsurance pool this week in parliament.
“Given the crippling insurance premiums experienced by many in the north west I have pushed hard and consulted widely with my parliamentary colleagues to make this a reality. The pool is on track for the scheduled 1 July start date which is very important for Durack residents and business. Residential, strata and small business property insurance policies in northern Australia are expected to be eligible to be covered by the reinsurance pool for the risk of cyclone and related flood damage,” Ms Price said.
The pool is expected to reduce insurance premiums by up to $2.9 billion for insurance policies over 10 years. Homeowners in northern Australia with the most acute cost pressures are expected to benefit from up to 46 percent premium discounts, strata properties up to a 58 percent discount and SMEs up to a 34 percent discount.
“The establishment of a reinsurance pool has always been important in Durack to deliver on the Government’s commitment to maximising northern Australia’s potential and to ensure Australians in cyclone-prone areas have access to affordable insurance,” she said.
“By reducing the cost of insurance for households, strata and small businesses, we are taking another step towards delivering our vision of improving the resilience, liveability and prosperity of northern Australia,” she said.
Treasurer Josh Frydenberg said that the Government was committed to the benefits flowing through to policyholders and has directed the Australian Competition and Consumer Commission (ACCC) to undertake price monitoring to ensure benefits of the pool are being passed onto policyholders.
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Media Contact:
Rose Crane 0427 587395, Rosemea.Crane@aph.gov.au.