The cyclone reinsurance pool bill was today referred to the Senate Economics Legislation Committee, which is due to report back by March 24, as the Federal Government faces a tight timetable to meet a planned July start for the scheme.

The referral follows the introduction and second reading of the bill in the House of Representatives yesterday by Assistant Treasurer Michael Sukkar.

The next joint sittings of the House of Representatives and the Senate will be held on March 29 and 30. The Federal Government is set to deliver the Budget on the last Tuesday of next month, ahead of an election due by the end of May.

“Improved access to affordable insurance is vital to the economic prosperity and resilience of households and small businesses alike,” Mr Sukkar told Parliament yesterday.

Over 10 years, the pool is estimated to reduce premiums by $2.9 billion and it is expected to cover more than 880,000 household, strata and small business property insurance policies in northern Australia, he said. Small business marine property insurance policies will be added from July next year.

The Federal Government earlier this week said homeowners in northern Australia with the most acute cost pressures would be expected to benefit from up to 46% premium discounts, strata properties up to a 58% discount and SMEs up to a 34% discount.

Savings of around 50% had been flagged by the government after it announced the proposed reinsurance pool last year.

The National Insurance Brokers Association (NIBA) warned in a submission on the draft bill, released in December, that real savings delivered to policyholders could be more in the range of 10-15%, based on information available at that time.

The bill introduced into parliament this week doesn’t include detailed pricing information or modelling for the scheme, which will be overseen by the Australian Reinsurance Pool Corporation, but a number of changes have been made following consultations.

“The savings that NIBA estimated in the cyclone reinsurance pool submission were based on the information available at the time the submission was prepared,” CEO Phil Kewin told insuranceNEWS.com.au today.

“The government has since provided more information on the expected benefit to policyholders. NIBA is pleased to see that the cyclone reinsurance pool is expected to provide significant savings to policyholders.”

Strata Community Association Queensland President Kristi Kinast says although modelling is yet to be released, the group is encouraged by the flagged premium reductions.

“Maximising the benefits of the Northern Australia Reinsurance Pool to strata is incredibly important, and a potential 58% saving as announced will be a game changer,” Ms Kinast said.

“The Northern Australia Reinsurance Pool will hopefully make a big difference to premiums, however other policy levers must be pulled to ensure the long-term viability of the pool in the region.”