Sometimes I don’t know whether to laugh or cry as this news story proves.
For a moment in early April, it looked like the Australian Federal Government had solved the 2024 Strata Insurance Crisis by accidently banning all insurance commissions paid to brokers, intermediaries and others [including strata managers].
But, just wait a minute.
It was a mistake, wasn’t what they planned and is being reversed so that those insurance commissions can keep flowing.
Apparently, when submitted new legislation to Parliament allowing for wider rights to give personal advice in relation to financial products including insurance, it included the repeal of an exemption that allows for payment of conflicted remuneration [insurance and other financial product commissions]: effectively preventing the payment of all insurance commissions and requiring brokers to charge fees [or higher fees] for their work.
After the ICA, NIBA and others flagged the problem, the government moved to fix it with the Financial Services Minister Stephen Jones saying:
‘The intent is to maintain the current exemptions for conflicted remuneration on insurance matters, except that advisers will now need to seek their client’s consent before accepting commissions if the adviser provided personal advice.’
So, thankfully, it seems that the 2024 Strata Insurance Crisis can continue and everyone will still have to find their own solutions.
You can read @AFR’s article about it, Labor scrambles after accidentally axing insurance commissions here.