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Wednesday, 29 February 2012
Page: 2390


Mr NEUMANN (Blair) (09:33): It is time that the insurance industry in this country did the right thing by our country, by our communities and by their customers. In light of the House of Representatives Standing Committee on Social Policy and Legal Affairs report in the wake of disasters, insurers need to respond to all the 13 recommendations of the committee and work with the government to make sure that they comply with those recommendations and earn the trust and respect of the people of my state of Queensland and of this country.

This report has received a lot of publicity in Queensland. The Queensland Times headline read, 'Insurers facing walk of shame' and at the Courier Mail it was, 'Insurance companies could afford to implement recommendations of flood report says Ipswich's Shayne Neumann'. The Gatton Lockyer Brisbane Valley Star, where Grantham was, also reports these recommendations. And from as far away as the Cairns Post: 'What a disaster inquiry'.

The evidence in this inquiry was damning. The insurance industry needs to respond to this. We want an insurance industry in this country that is competitive, profitable and viable. But it needs to be efficient, effective and responsive. There needs to be greater accountability and transparency. The insurance industry should not say that there should be higher premiums. Let us see what the Australian Prudential Regulation Authority statistics from September 2011 say. They say that the private sector insurance industry generates more than $35 billion each year, with assets close to $114 billion. Annual profit was reported at $5.6 billion. They can afford to respond. We are recommending that ASIC and the Financial Ombudsman Service undertake a process of naming and shaming.

No longer should there be a situation where these organisations hide behind provisions in legislation and a voluntary code of practice and regulations that are simply not good enough. Why should they be exempt from unfair contract obligation? Why should the insurance industry be protected when there are breaches of the principle of utmost good faith? Why should there be a voluntary code of practice? There should be one that is mandatory across the industry. Why should they have a get-out-of-jail-free card in 4.3 of the voluntary code of practice? Why should they be allowed to treat people with such disdain and disrespect? It is time that they responded. It is time that they complied with their obligations. Insurance companies are part of our community. They have obligations. There is a social contract. They have treated the people of Ipswich, the people of the Somerset region and the people of south-east Queensland and Brisbane with disdain and distrust. It is time that the insurance industry had a good hard look at itself and started to work with the government. I call upon the Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations to work with the insurance industry. I thank him for his support and cooperation with respect to the terms of reference. There needs to be a standard definition of what is required and what obligations need to be fulfilled. (Time expired)