A Senate committee inquiry into the cyclone reinsurance pool has recommended that Federal Parliament pass the legislation, despite shortcomings pointed out over its scope and doubts over the level of savings that will be achieved.

A report handed down today says the committee is “persuaded by the evidence from Treasury” on comprehensive data analysis that underpins the pool’s design and that there was strong support in submissions to pass the bill.

“Given the numerous reviews and inquiries in recent years which support action being taken, the committee is firmly of the view that the establishment of the reinsurance pool is crucial in ensuring that Australians in cyclone-prone areas have access to affordable insurance,” the report says.

“The need to act now is vital. The 12 month and subsequent reviews provide an opportunity for adjustments to be made.”

The legislation has already passed the House of Representatives, while the Senate will resume sittings next week.

In additional comments, Labor Senators on the committee support the pool, but back calls to extend the proposed related damage period from 48 hours to seven days and also say the Government should release modelling and spend more on disaster mitigation.

Liberal Senator for NSW Andrew Bragg also highlights the need for mitigation and adaptation and says the scheme “poses risks which require vigilant oversight”.

“I therefore commend the government for its commitment to undertake a review of the reinsurance pool just 12 months after the bill's implementation to ensure that the scheme's targeted focus is maintained, and any appropriate amendments can be made in a timely manner,” he says.

Greens Senator Nick McKim says the party will seek amendments to immediately expand its scope to include all flood damage to residential and small business property, allowing people affected by the recent Queensland and NSW flooding to be included. He also says motor vehicles should be added to the cover.

Senator McKim also proposes that the statutory review of the Australian Reinsurance Pool Corporation specifically examine the expansion of the scope of damage covered to include all damage to residential and small business property resulting from climatic events.

Money required to establish and maintain the reinsurance pool should be backed by taxation on entities extracting and combusting fossil fuels, he says.

The Senate committee inquiry held a hearing earlier this month when groups appearing included the Insurance Council of Australia, the Northern Australia Insurance Lobby, Treasury and the Australian Prudential Regulation Authority. The committee also published 22 submissions on its website.

The report is available here.