Terms of reference released for Parliamentary Inquiry into insurer responses to the 2022 floods

The Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP, has given notice to the House of Representatives tabling a motion to establish a Parliamentary Inquiry into insurer responses to the 2022 floods. This motion was presented to the house earlier this week, on Monday 7 August 2023. 

As reported earlier when the announcement was made, NIBA fully supports this Parliamentary Inquiry, commending the Government for taking a whole-of-economy view to improve outcomes for Australian consumers.  

The inquiry is going to be consumer focused, investigating things such as land use planning, affordability of coverage, supply chain issues, labour shortages, claims handling, and dispute resolution processes. 

The committee will hear directly from affected communities, holding public hearings across the country in regions affected by the 2022 floods. A final report will be handed down during the third quarter of 2024. 

The inquiry will inform the Federal Government’s broader program of work to address insurance access and affordability. This includes up to $1 billion over five years from 2023‑24 (up to $200 million per year) to invest in measures that better protect homes and communities from extreme weather through the flagship Disaster Ready Fund. 

The Government is taking proactive steps to mitigate disaster risk and build climate resilient communities. Currently, 97% of disaster funding is going toward recovery and only 3% toward risk mitigation. 

The terms of reference for the inquiry have been released, which are as follows: 

1. Response of insurers to the claims resulting from major 2022 floods, including: 

• Southeast Queensland and northern New South Wales (NSW) floods of February and March 2022; 
• Hunter and greater Sydney floods of July 2022; 
• Victorian, NSW and Tasmanian floods of October 2022; and 
• Central-West NSW floods of November and December 2022; 

      2. The inquiry shall have regard to the following matters in respect of the aforementioned floods 

• the experiences of policyholders before, during and after making claims; 
• the different types of insurance contracts offered by insurers and held by policy holders; 
• timeframes for resolving claims; 
• obstacles to resolving claims, including factors internal to insurers and external, such as access to disaster hit regions, temporary accommodation, labour market conditions and supply chains; 
• insurer communication with policyholders; 
• accessibility and affordability of hydrology reports and assessments to policy holders; 
• affordability of insurance coverage to policy holders; 
• claimants’ and insurers’ experience of internal dispute resolution processes; and 
• the impact of land use planning decisions and disaster mitigation efforts on the availability and affordability of insurance. 

      3. The inquiry shall also have regard to insurer preparedness for future flood events 

      4. The inquiry will take into consideration findings from other reports such as Deloitte’s external review of insurers' responses to the 2022 floods, and ASICs Claims Handling review.