NSW consults on proposed homebuilding program reforms – Regulation & Government – Insurance News
NSW consults on proposed house building program reforms
July 11, 2022
The State of New South Wales Insurance Regulatory Authority (SIRA) has released a discussion paper regarding its proposed steps to improve the Housing Construction Compensation (HBC) insurance scheme.
The SIRA recommends lifting the minimum insurance coverage – currently $340,000 – to take into account the increase in the average cost of building a new individual dwelling; extending the scheme to cover victims of illegally uninsured home construction; and allow owners to claim earlier in the dispute resolution process.
The regulator’s list of 15 reforms also recommends increasing the amount of coverage for non-completion and changing the $20,000 threshold for requiring prime contractors to carry insurance.
Another proposal listed in the document concerns broader insurance exemptions for high-rise buildings. Comments are requested on whether the exemption for the construction of multi-unit buildings over three storeys should be expanded so that insurance is not required for renovations or alterations to such buildings.
The discussion paper follows a review of the HBC program by the Independent Pricing and Regulatory Tribunal, which released its final report in December 2020.
The public company icare remains the only insurer offering insurance under this scheme, despite efforts to encourage private entrants to participate. Private insurers participated in the scheme until June 2010 and since then it has been run by the government and has been subject to reforms, premium increases and state support since 2017 to push it through. on a sustainable financial footing.
One of the issues in the discussion paper is about improving competition in the plan so that icare is not the only insurer. The question asked whether it was commercially viable for multiple insurers and providers to operate under the system.
The plan is mandatory for prime contractors undertaking work worth more than $20,000.
It received 1,078 insured loss notifications and 492 insurance claims during the 2020/21 financial year.
The deadline for submitting applications is August 16.
Click on here for the working document.