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Move for federal national disaster insurance scheme



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For more information contact Sally Ward on 0409 696 531 or Nick Xenophon on 0411 626 677 or John Tsouroutis on 0419 007 008

30/01/2012

MOVE FOR FEDERAL NATURAL DISASTER INSURANCE SCHEME

PUSH FOR SENATE INQUIRY NEXT WEEK

WHAT: PRESS CONFERENCE AT 1PM TODAY (SA TIME) WHERE: OUTSIDE NANO CAFÉ, EBENEZER PLACE, ADELAIDE

Independent Senator for South Australia, Nick Xenophon, has called for the establishment of a Federal natural disaster insurance program to guarantee homeowners and businesses aren’t left uninsured in the event of a natural disaster.

A similar scheme already has been in place in the United States since 1968.

The call has been backed by the former Group Managing Director of the Territory Insurance Office, John Tsouroutis, whose expertise was critical in reforming the financial arrangements between the Commonwealth and the States in the wake of the 2011 Queensland floods.

The new arrangements require new standards of probity and diligence on the part of the states to have adequate insurance arrangements for their assets, with a view to avoiding any future flood levies.

Senator Xenophon will be moving for a Senate inquiry into establishing a natural disaster insurance scheme in Australia when Parliament resumes.

“The blame game between various tiers of government and the insurance industry has resurfaced again with the latest flood disasters,” Nick said.

“But those suffering the most are those who haven’t been able to get insurance, or are under-insured, and now have lost everything. Having a national scheme would spread the risk and fix the problem once and for all.”

The US scheme - the National Flood Insurance Program - enables property owners in designated communities to purchase insurance at a fair and competitive rate from a Government-backed entity.

The insurance comes with broader obligations for flood mitigation measures to be implemented at a community level, and also that new homes not be built in flood-prone areas.

“The current situation is a case of market failure. Given that potentially hundreds of thousands of Australians can’t obtain affordable flood insurance, there is no reason why a similar approach shouldn’t be adopted here,” Nick said.

Mr Tsouroutis said there are far better ways that governments can deal with natural disasters.

“Having a mish-mash of small insurance portfolios and policies around the country just doesn’t work. There needs to be a uniform natural disaster policy rather than the needless complexity we have now,” John said.