Complying with “overlapping and expanding” regulations has come at great cost to productivity and consumer outcomes, according to the Insurance Council of Australia.

The council estimates the industry is shouldering compliance costs of up to $3.5 billion, representing 6% of gross written premium.

“The cumulative impact of regulatory complexity imposes significant productivity costs on the general insurance sector,” it says in a submission to the Board of Taxation.

“For the insurance sector, one of the country’s most heavily regulated industries, streamlining tax administration would improve operational efficiency, free up resources and support affordability for consumers.

“The overall compliance burden stems not from any single requirement, but from the cumulative impact of overlapping and expanding obligations.”

A Board of Taxation consultation on reducing red tape in the tax system closes today. It expects to report to the federal government by June 30.

“Tax policy reform ideas are outside the scope of the review,” its consultation paper said.

Insurers support the board’s efforts to improve tax system efficiency.

“By addressing both legislative and administrative red tape, the review can help build a more predictable, proportionate and transparent system, aligned with broader government goals to boost productivity,” the council’s submission said.

“We encourage a shift towards longer-term thinking that prioritises genuine compliance cost reduction over incremental administrative changes.

“This approach will ensure that red tape reduction delivers tangible benefits for businesses and the economy, rather than simply redistributing compliance effort.”

The submission calls for a “more harmonised approach to insurance taxation to reduce red tape and nationally consistent insurance tax settings to simplify compliance for insurers operating across jurisdictions. Practical steps could include uniform reporting templates, standardised data definitions, and synchronised filing periods.”