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icare names nine brokers for smaller builders warranty panel

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NSW state-owned insurer icare has appointed nine distributors to its Home Building Compensation Fund (HBCF) panel after completing a tender process.

The distributors are Coverforce Insurance Brokers, Don Hutton – The Builders Insurance Broker, Finsura Insurance Broking, HIA Insurance Services, Insurance House Group, Master Builders Insurance Brokers, MBA Queensland, Savill Hicks and Willis Towers Watson.

The tender was contested by 20 respondents who were existing distributors as part of a panel of 23 providers. The insurer in 2017 reduced the size of the panel from more than 100 participants.

“This new panel is intended to provide a better balance of portfolio opportunities for distributors and improved service for builders and homeowners,” icare said today.

“Distributors on the panel will also need to be more transparent on fees and charges, enhancing competition for the benefit of builders and homeowners.”

Contracts for the new panel will start on April 30 and are for an initial two years, followed by two one-year extension options.

icare is the sole provider for the HBCF, which provides last-resort cover for defects in new low-rise properties when owners are otherwise unable to gain compensation.

Typically, it is called upon when a building business no longer exists, often because they have become insolvent, or in cases when a builder has disappeared, died or had their licence suspended.

Building businesses must pay compulsory insurance at the beginning of every project covered under the scheme to fund any potential claims.

The National Insurance Brokers Association last year raised concerns over plans to reduce the size of the panel from 23 distributors and to reduce the role of brokers in the insurance process.

“The ability to provide HBC insurance should be determined by the experience and capabilities of brokers, not arbitrary limits set by icare,” it said in a submission to an Independent Pricing and Regulatory Tribunal (IPART) hearing into home building compensation.

IPART last year recommended that the use of brokers should no longer be mandatory and that building businesses should also be able to use an accountant or other professional or complete documentation themselves.