Last week the Australian Government announced its intention to form a Senate Inquiry into insurer response to the 2022 floods. This week, according to a media release from Minister for Financial Services and Assistant Treasurer the Hon. Stephen Jones MP, will be presenting the motion for its consumer-focused Inquiry to the house this Monday, August 7th.
From the media release (available here):
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:
- response of insurers to the claims resulting from major 2022 floods, including:
- south?east Queensland and northern New South Wales (NSW) floods of February and March 2022;
- Hunter and greater Sydney floods of July 2022;
- Victorian, NSW and Tasmanian floods of October 2022; and
- central west NSW floods of November and December 2022;
- the inquiry shall have regard to the following matters in respect of the aforementioned floods
- The experiences of policyholders before, during and after making claims;
- the different types of insurance contracts offered by insurers and held by policy holders;
- timeframes for resolving claims;
- 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;
- insurer communication with policyholders;
- accessibility and affordability of hydrology reports and assessments to policy holders;
- affordability of insurance coverage to policy holders;
- claimants’ and insurers’ experience of internal dispute resolution processes; and
- the impact of land use planning decisions and disaster mitigation efforts on the availability and affordability of insurance.
- the inquiry shall also have regard to insurer preparedness for future flood events
- 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.