Industry expert John Trowbridge released Wednesday the first part of his three-phase independent review of current strata insurance practices. This review aims to evaluate different elements related to strata insurance, including strata management, insurance broking and insurance underwriting.
This first phase is a consultation paper focused on evaluating the disclosure practices of strata intermediaries and overcoming limited understanding of current practices.
Trowbridge described the market structure for strata insurance as “unorthodox,” noting that “strata insurance is different from that of all other insurances because of the multi-owner nature of strata properties and the participation of strata managers in the chain from insurer to client.”
A key aspect of the paper are the questions addressed to industry professionals and other interested parties. These questions revolve around the corporate relationships between strata managers and brokers, the regulatory obligations of brokers and strata managers, and proposals for modifying disclosure practices.
Those who wish to respond to these questions, or to any other parts of the paper, have until April 20 to send their insights. Trowbridge will be receiving submissions through his email address, [email protected], and will subsequently publish a report with his findings and recommendations.
Trowbridge’s review was commissioned by the Steadfast Group. Managing director and CEO Robert Kelly emphasized that the project, while relevant to the group’s involvement in strata insurance, is completely independent of its commercial interests, adding that its main goal is to “identify meaningful initiatives aimed at overcoming the structural issues” currently troubling the market.
“Steadfast believes that the market is to some extent dysfunctional through its value chain from customer (lot owners) to strata managers to brokers to underwriting agencies to insurers,” Kelly noted in the paper’s foreword. “Most of the issues under question have arisen gradually through the historical evolution of the market. Steadfast wishes to see these issues thoroughly investigated.”
The rest of the review will build on the ideas outlined by Trowbridge in the consultation paper. Phase two will cover possible reforms to renumeration. Phase three, meanwhile, will investigate the competition, affordability, and availability of strata insurance.
