Strata management company Netstrata says it will ask NSW Fair Trading to conduct a review of its practices after an ABC report highlighted excessive insurance fees paid by apartment owners. 

“We are aware of the allegations made by the ABC which are of concern to Netstrata. We take our relationships with our customers very seriously and understand that transparency is very important for our business and the sector,” the company said in a statement sent to insuranceNEWS.com.au.

“We do apologise to our customers that may be affected by any lack of transparency to date. We are undertaking an immediate audit to ensure that any concerns that remain for our customers are answered, and we will ask NSW Fair Trading to conduct a review of our practices.” 

The ABC report says Netstrata’s wholly owned brokerage Strata Insurance Services has been charging clients at rates in excess of industry standards.

In one case, apartment owners said the company “had charged brokerage at about 64% of the base premium”, but in its annual financial report to owners Netstrata had given only the headline total figure. 

The report also raises concerns over commercial arrangements with other contractors and suppliers. 

The Australian Consumers Insurance Lobby (ACIL) last month called on the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission to investigate problems in the strata sector. 

The group this week said it had also opened an online survey to seek information directly from individuals, businesses and industry insiders on their insurance experiences in the strata sector. 

Netstrata started in 1996 managing schemes in the Hurstville and Sutherland Shire areas and now has offices servicing Sydney, Newcastle and Wollongong. 

The company discloses its ownership of Strata Insurance Services in its annual mandatory report to clients, ABC says. 

“An ordinary person would understand that we do have an internal brokerage and that they do charge fees, and that we disclose those fees when we place the policy,” MD Stephen Brell said in the report. 

“Our advice is that the [mandatory] disclosure when it comes to our insurance broking is accurate.”