The Australian Small Business and Family Enterprise Ombudsman has launched a review into a discretionary mutual fund proposal that’s aimed at solving insurance problems faced by amusement parks and the leisure and recreation industry.

Ombudsman Bruce Billson says the review will be a “deep dive” into the inaccessibility of insurance for the sector so further advice can be provided to the Federal Government on measures that could help the businesses secure cover needed to remain in operation.

“Our country shows that we all love so much are facing a bleak future because small businesses, such as ride-operators, cannot get insurance coverage,” Mr Billson says. “Closure of these small businesses will mean significant job losses and hurt local economies.”

Mr Billson says his office will independently examine a proposal from the Australian Amusement, Leisure and Recreation Association (AALARA) to establish an industry-owned discretionary mutual fund as the most “effective and durable” solution.

“We will consider if this proposal will resolve the insurance issues in the sector, the responsibilities and obligations it would impose, its adequacy in satisfying regulatory requirements as well as other options that may assist these businesses,” he said.

“This review will use the Ombudsman’s internal expertise and seek external expert advice on complex issues, such as specialist legal, financial sustainability and actuarial matters.”

AALARA, which has been working with Aon on the potential establishment of a mutual to meet the sector’s needs, welcomed the review.

“The amusement, attractions, leisure and recreation industries are facing catastrophic consequences without necessary insurance coverage,” President Shane McGrath said.

The review will provide information to the Government about the challenges members are up against regarding insurance accessibility, as well as what that means for the businesses and what support could help address insurance issues faced by the sector, Mr McGrath says.

A final report is expected to be completed in August.