Cyclone reinsurance pool legislation passed

On Tuesday 29 March, the Federal Government’s Cyclone Reinsurance Pool legislation was passed through the Senate, paving the way for the establishment of a Reinsurance Pool to cover property damage, as a result of a declared cyclone event and/or related flooding.

In light of the flooding in parts of Queensland and Northern New South Wales, an amendment was proposed by the Greens to expand the Reinsurance Pool to provide broader flood cover, however, the majority of the Senate voted against it, citing possible delays to the 1 July 2022 implementation date.

The idea, however, has not been ruled out entirely with Labor indicating that they would be willing to consider the expansion of the pool during the statutory review process.

The pool, which will be operated by the Australian Reinsurance Pool Corporation (ARPC), will provide reinsurance cover for domestic and small business properties, as well as mixed-use strata properties when at least 50 percent of floor space is used for residential purposes.

With the legislation now passed, the industry has called on the ARPC to release its pricing schedule to allow insurers sufficient time to communicate with policyholders as to the level of relief they will receive.

The Federal Government has previously announced that policyholders could receive a premium discount of up to 46 percent with even greater discounts flagged for strata properties.