The Australian Consumers Insurance Lobby has again pushed for reforms after the ABC yesterday reported more details about the fee practices of Netstrata and its wholly owned broker, Strata Insurance Services.

The broadcaster said Netstrata had “quietly” dumped years of insurance invoices into its client portal detailing the fees apartment owners have paid to SIS.

It said apartment owners were seeing for the first time what they had paid and, in some cases, fees charged as a percentage of the base strata insurance premium exceeded industry norms. One apartment owner told the ABC her block was charged a fee that was 148% of the base premium.

insuranceNEWS.com.au has reached out to Netstrata and SIS for a response to the ABC report.

ACIL says a fee calculated at 20%-25% of base premium is the industry standard.

“The report revealed allegations that Strata Insurance Services has been charging fees as high as 148% … raising serious concerns about consumer exploitation,” the consumer group said.

Netstrata’s business practices are being investigated by NSW Fair Trading after the ABC reported earlier this year that the Sydney-based company routinely used its insurance arm to charge apartment owners brokerage fees as high as three times the typical rate.

A draft report on the investigation, conducted by McGrathNichol, has been delivered to the state government. NSW Fair Trading has not said when it will publicly release the findings and recommendations.

"As part of its investigation, the regulator engaged an independent examiner to prepare a report into [Netstrata's] operations," NSW Fair Trading told insuranceNEWS.com.au today.

"Fair Trading is now reviewing the report. While the investigation is under way, no further comments can be made."

It adds that "NSW Fair Trading is aware of concerning allegations about insurance brokerage fees and lack of disclosures by NetStrata to owners’ corporations."

ACIL says it has urged the National Insurance Brokers Association and Insurance Brokers Code Compliance Committee to address transparency, fee practices and other concerns raised by the ABC reporting.

It has also asked the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission to investigate whether Strata Insurance Services’ remuneration practices violate its financial services licence obligations.

ACIL chair Tyrone Shandiman says with NIBA due to review its code of practice soon, it is important to “take action to ensure the standard imposed on its members does not just meet the law”.

He says brokers must be required to meet “the standards of ethical practice that consumers come to expect … and also [meet] ethical standards that ensure we don’t see future instances of insurance brokers that are bringing the industry into serious questions on reputable news channels like the ABC”.

Mr Shandiman says NIBA’s code of practice guidance for strata brokers, released recently, can be improved. For instance, the association should provide guidance on “appropriate” processes for appointing brokers due to potential conflict of interest risk, he says.