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Monday, 20 August 2001
Page: 29737


Ms HALL (4:49 PM) —An issue of great concern to many people throughout Australia is the insurance industry and the many problems that are being experienced in relation to that industry. Every day a new concern is raised with me about insurance companies increasing their premiums, denying liability, and promising one thing when touting for business and delivering another when a claim is made. At the extreme end we have the HIH collapse and the enormous hardship that that collapse has caused to many thousands of Australian families, businesses and professionals like doctors, lawyers and accountants. Every sector of our community and economy is suffering as a result of that collapse. The most frightening aspect of that collapse is that APRA and ASIC, the bodies responsible for monitoring the insurance industry, have failed dismally in their duty to the Australian people.

Australian people do not have a choice as to whether or not they have insurance. We insure our health. We have only to turn on the television and look at the government's multimillion dollar advertising campaign to encourage us to take out health insurance. We insure our homes. That is a requirement of obtaining a mortgage. Businesses need insurance to operate. The minimum standard to register our cars is to obtain a green slip, which is issued by insurance companies. Community organisations need to get public liability to be able to hold events. There is also professional indemnity. Insurance is a safety net that Australians rely on for protection. Unfortunately, in recent times the power of Australian insurance companies has increased whilst at the same time their accountability is diminishing. Ordinary Australians—pensioners, families, small businesses and volunteer organisations—have been the losers. On the one hand we have the industry increasing its power and making greater profits with less accountability and on the other hand we have ordinary Australians who are being affected by this.

The problems with the insurance industry in this country really reflect the government's priority, which is to the big end of town and not to the ordinary Australians. `Profit before people' is this government's motto. We have to see how it was dragged kicking and screaming to have a royal commission into HIH and how the terms of reference are very limited. However, it is a very different matter when we look at the royal commission into the building industry.

In recent times I have been inundated with complaints about the insurance industry, the most obvious example being HIH, from people from all areas within the community: home owners, builders, accident victims and people with professional indemnity insurance. Ordinary Australians are being punished and as a result we have had a massive increase in premiums. I have here a letter from Mrs Betty Mawdsley, who lives in Swansea. She had been attending an exercise group for people between the ages of 60 and 80. She had been doing that for six years but the group had actually been going for some 20 years. Recently, the classes had to be wound up, simply because of the increased premiums for public liability insurance—the person who was conducting those classes could not afford to pay it. This has created an enormous gap in those women's lives. Volunteer organisations are being told that they will not be insured if they have people over the age of 70 or 80. Two historical societies in my area have recently been denied insurance because of the age of those people who are involved. On the one hand we have the Treasurer urging people to become involved and undertake volunteer activities, but on the other hand we have insurance companies denying coverage to those people.

Recently, I was in the electorate of Blair and I learnt about how the great watermelon and grape festival had an enormous increase in their public liability insurance. It had gone from $900 to $2,000 and was really threatening the viability of that festival. The tin festival in Cairns had to be cancelled because of the massive increase in the price that they were required to pay for their insurance. My understanding is that it was three times higher than it had been the previous year. I am sure the members on the other side of the House are most concerned about that. This government's performance when it comes to the protection of the Australian people in this area is to be condemned. The government is only interested in protecting its friends at the big end of town. It has allowed premiums to skyrocket, whilst ordinary Australians are placed at risk.

One of the most horrendous miscarriages of justice and manipulation of the system that I have come across relates to a claim made by Mr Vaughan of Jewells, a suburb that lies within the electorate of Shortland. His son was involved in a car accident, and when the matter was heard in court the court found in favour of GIO, based on the evidence. The GIO misrepresented the case. They advised that the policy had been rejected when in fact it had not been. They offered an ex gratia payment of $14,000, less the full premium, less the excess, no indemnity, no liability and with an agreement to take no further action. This was not accepted by Mr Vaughan, because it had enormous implications for his son. This matter has been to the Department of Fair Trading in New South Wales and to the Insurance Inquiries and Complaints Commission and, unfortunately, the matter has not been resolved.

The issue at the heart of the question related to the duty of disclosure. When the renewal was completed by Mr Vaughan, he did not advise that he had been fined within the previous 12 months. The question was not asked but the duty of disclosure still existed, and on that basis his claim was denied. As I mentioned earlier, he had 90 days to complete mediation with the GIO, and then the matter was referred to the Insurance Inquiries and Complaints Commission. That is supposed to be an independent mediation body but it is financed by the insurance industry. Then the matter was referred back again. They said that nothing could be done: the matter was outside their jurisdiction because it had been heard in court. Then Mr Vaughan contacted the Insurance Council of Australia. They referred it back to the IEC and they declined to answer because the matter was confidential.

The bottom line is that this man has been denied justice. His son has subsequently been refused insurance because the court found that he had made a fraudulent non-disclosure, and the matter is still unresolved. Mr Vaughan has corresponded with the minister on numerous occasions about the need to change the legislation, but the minister has failed to act. This is just one example of the power of the insurance industry and the failure of the government to protect ordinary Australians. This is definitely a government for the big end of town, one that ignores ordinary Australians and the many problems that they have in their lives. (Time expired)