The ICA's recommendations focus on several key areas. Firstly, the council advocates for stronger governance within owners corporations, suggesting that enhanced transparency and accountability, combined with targeted education for committee members, could help address complex financial and insurance matters. Improved governance is essential to ensure that strata schemes are managed effectively, reducing the risk of defects and maintenance issues that can lead to higher insurance costs.
Additionally, the ICA calls for a careful review of proposed licensing schemes for strata managers, urging that any new requirements be grounded in evidence to avoid unnecessary costs or unintended effects. The council also recommends full disclosure of payments to strata managers that could influence insurance product selection, and a thorough assessment of market impacts before considering a ban on commissions. Transparency in financial arrangements is crucial to maintain trust and ensure that owners corporations are making informed decisions.
Other proposals include lowering the threshold for collective sales of strata properties to facilitate the renewal of older buildings and introducing stronger enforcement mechanisms, such as public complaints registers, to hold owners corporations accountable for defects. These measures aim to address the challenges posed by aging infrastructure and ensure that strata properties remain safe and insurable.
In November 2024, the ICA released a policy paper with 17 proposals aimed at improving the strata insurance sector. The document addresses challenges including premium increases, supply chain disruptions, and more frequent extreme weather events. The ICA's proposals encourage collaboration among government, insurers, brokers, and other stakeholders to improve affordability, transparency, and risk management.
Key recommendations include expanding education for strata managers and owners' corporation members, enforcing transparency in fees and service provider relationships, promoting land-use planning that reduces risk, embedding resilience in building codes, and establishing maintenance regimes overseen by owners' corporations. The ICA also noted legislative changes, such as new requirements for retail client consent on insurance commissions under the Corporations Act 2001 from July 2025, and enhanced disclosure rules for strata managers in New South Wales effective February 2025.
The ICA's call for reforms underscores the need for proactive measures to address the factors contributing to rising insurance costs in Victoria's strata sector. By implementing these recommendations, the state can improve the governance and maintenance of strata properties, ultimately leading to more affordable and accessible insurance for residents.
