MGA executive chairman and founder John George says sharing of insurance commissions between strata managers and brokers does not need banning, but a percentage limit should be enforced to prevent “gouging”.

Strata Community Association NSW has urged members to move away from taking a share of broker commissions or fees, and the state government is considering the impact of a ban.

But Mr George, in an article for insuranceNEWS.com.au, argues “disclosure is key” and that a ban would be a “sledgehammer to crack a nut”.

“My view is that a fair maximum total commission and fee should be mandated at, say, 23%-25% of the base premium.

“In the event an amount above this is charged, that excess sum MUST be disclosed in a separate and upfront legally mandated document that discloses the actual extra percentage and dollar charge.

“This will ensure it is identified to the client and will stop the gouging.”

See ANALYSIS.