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Tuesday, 28 February 2012
Page: 2171


Mrs MOYLAN (Pearce) (17:18): From the outset can I also thank the chair of the committee and the secretariat of the committee for the splendid work they did to facilitate this inquiry and to reach what I think are very sensible conclusions and recommendations that I hope the government will note and act on.

The succession of natural disasters across Australia over the last four years has taken a heavy toll in human life and also in the destruction of both the natural and the built environment—not to mention the terrible heartache for many people caught up in these disasters. Our heart goes out to those who still are battling to get their lives back together again.

In the Queensland floods alone 35 people tragically lost their lives, two million people were living in declared disaster zones and 28,000 homes required rebuilding. We have also seen floods in Victoria, New South Wales as well as fires and hail and cyclones in Western Australia. These catastrophes resulted in over 185,000 insurance claims between 2010-11 and a $4.3 billion damage bill. Whilst these events placed unprecedented strain on the insurance industry, the overwhelming number of distressing experiences reported by claimants has exposed significant deficiencies in the way claims are handled and the regulatory framework underpinning the insurance industry. In investigating these issues, the committee held 18 public hearings across the country, visited numerous affected areas and received 79 submissions.

The report In the wake of disasters contains 12 critical recommendations which I urge the government to closely review and adopt. Of particular concern to the committee is the current legislated exemption of insurers, which the member for Moreton made reference to as well, from the unfair contract provisions which normally would protect consumers in other types of contracts.

People faced with the loss of their homes and businesses deserve more than piecemeal protection of their rights. The industry is self-regulated and operates under a voluntary code of conduct which, unfortunately, the Australian Competition and Consumer Commission has no authority to enforce. Time and again we have seen that voluntary codes do not work to protect the best interests of consumers and, indeed small business people. Not only must the legislative protections be strengthened; the regulatory authorities must be resourced and empowered to do their job effectively. For the benefit of both consumers and insurers, policies must be understandable. Knowing exactly what is and is not covered in plain English can make the claims process easier and prevent litigation, which, after all, is costly to everyone concerned and very distressing to the claimants.

Submissions to the committee also stressed that the whole claims process needs to be more seamless and certainly more transparent. Some recent initiatives by insurers have received praise—for instance, in my own electorate of Pearce the Insurance Council of Australia established very quickly a desk in their recovery centre following the Toodyay fires, and for that we were grateful. Their prompt response and ease of access was much appreciated by the community. But, unfortunately, a number of people said they felt let down later by the absence of follow-up in the post-claim period. The effect of delays should not be underestimated. Without prompt settlement of claims, families and communities cannot start the rebuilding process. With every delay the emotional distress builds, slowly engulfing those already traumatised by the events they have faced. Relationships suffer, livelihoods languish and the social fabric of communities can be torn apart.

So the recommendations contained in this report are much needed. With the little remaining time I have left, I draw the attention of the chamber to recommendation 12, where the committee recommends that an action group be formed to look at the reasons for market failure and the hugely escalating cost of insurance premiums to the public. In doing that they might also look at some of the systemic problems that are causing great concern in the sector, such as buildings being built in cyclone-prone areas and in flood-surge areas, as well is the ageing infrastructure for delivering power in many parts of Australia.

The DEPUTY SPEAKER ( Mr Windsor ): Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.