Flood cover discussions due this week

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6 February 2012

Federal Treasury officials will join insurance and consumer group representatives this week to discuss how policyholders are informed about flood cover.

The roundtable hearing of the House of Representatives Standing Committee on Economics follows the release of flood cover amendments to the Insurance Contracts Act in December.

The amendments compel insurers to use a standard flood definition on all home and contents policies, small business policies and strata contracts.

The committee is seeking to determine the adequacy of the Insurance Contracts Amendments Bill 2011 and associated draft regulations.

Insurers must “clearly inform” the client in writing about the extent of flood cover before the contract is completed. A “key facts sheet” must also be provided with every policy alongside the product disclosure statement.

The Government has allowed a two-year implementation period for introducing facts sheets, starting from the date when the bill gains royal assent.