The Australian Consumers Insurance Lobby and property owners have pressed the NSW government to ban strata commissions, saying “leadership is essential” after a row erupted over the arrangements.

ACIL and the Owners Corporation Network say strata management company PICA Group’s threat to cancel its membership of Strata Community Association NSW over the peak body’s stance on commission reform is “deeply troubling”.

As reported yesterday, PICA says it fears SCA NSW’s plan to phase out sharing of insurance commissions and broker fees from next year may lead to higher costs for consumers. The management group has proposed an alternative whereby a fixed fee, paid by insurers and adjusted to the consumer price index, replaces commission-based payments.

But the consumer groups say PICA is sending “the wrong message” with its threat to quit SCA NSW.

“It highlights why government leadership on this issue is essential,” they say in a joint statement today.

“The SCA has shown leadership in moving the industry towards higher standards. Those efforts deserve recognition and support, not resistance from those who benefit from opaque practices.” 

The two groups have urged NSW Better Regulation and Fair Trading Minister Anoulack Chanthivong and Fair Trading commissioner Natasha Mann to proceed with strata reforms including banning commissions and other conflicted payments.

“We are concerned that recent public statements by PICA Group misrepresent the effect of proposed reforms,” they say.

“The claim that removing insurer payments would burden consumers is misleading. These costs are already borne by owners through inflated premiums. Transparency does not create new costs; it simply reveals existing ones. 

“PICA’s response only reinforces the importance of the NSW government pressing ahead with its own reform agenda.”

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