Steadfast CEO Robert Kelly has defended strata commissions and the company’s disclosure practices at a Senate inquiry hearing where he was questioned about issues raised in a Four Corners program.

Inquiry committee chair Mehreen Faruqi asked Mr Kelly at this morning’s hearing whether he would heed an Australian Competition and Consumer Commission call in the ABC show to ban the commissions.

Mr Kelly said general insurance around the world was transacted with commissions, and he rejected blanket bans while backing transparency for owners’ corporations around broker and strata manager remuneration. 

“Just thinking that you can stop commission and reduce cost, it’s erroneous to say that,” he said.

“Somebody has to pay for the services. Whether those services are worth the cost of commission, that should be a debate between the person who seeks those services and the person who offers those services in a negotiation between them, and should be transparent.”

When asked if there should be a broad inquiry, Mr Kelly said commissions had been reviewed by Michelle Levy after the Hayne royal commission, and recently passed NSW legislation is strengthening strata sector transparency.

Other states are likely to “fall in line” with the NSW laws, which require strata manager remuneration for various services to be cleared with owners’ committees, Mr Kelly said.

He said Steadfast has largely completed its own review to remove opaqueness in its businesses around who gets paid for what services, with assessments undertaken in response to a wider strata sector review Steadfast commissioned from independent consultant John Trowbridge.

“I’m pleased to say that by the middle of this month, well, probably about the 20th of this month, the last of our businesses will have shed itself of any opaqueness and the crystallisation of who gets paid what will be omnipresent,” he told senators.

Steadfast general counsel Christoper Sargent said Steadfast took allegations raised in the Four Corners program “very seriously”, and there was always room to improve.

“That’s part of the review process that we’re going through in terms of the documentation and the transparency. Yes, we’re satisfied that we pass the legal test and the ethics test, but is that really meeting the expectations of today?” he said.

“We really want to make sure that we are, so we’re going back over the documentation to make sure that disclosure is crystal clear all the way through to the owners’ corporations.”

Mr Kelly was critical of the Four Corners report for containing incorrect information and the way it was edited, and said he had taken offence at the show “putting my answer into a question that wasn’t anything to do with the question that was put before”.

An Owners Corporation Network submission was incorrect in saying the company had an 81% strata broker market share, he said, noting Steadfast brokers account for 44% of the turnover of underwriting agency CHU.

Steadfast was also questioned about rising broker incomes due to percentage-based commissions pegged to surging premiums, which are increasing policyholder affordability pressures.

Mr Kelly told the committee the company has wound back its commission level on householder policies from 22.5% five years ago to 17.5% and 15% as premiums have escalated.

“Whether that’s appropriate to do in strata, I think that’s a debate, and it’s a worthy debate to have at this particular time,” he said.

He told the hearing the federal government’s cyclone reinsurance pool, which provides cover for 48 hours after a cyclone, is reducing the cost of strata insurance in Queensland, and he wants the scheme extended to flood.

The Senate select committee inquiry into the impact of climate risk on insurance premiums and availability has held hearings in Ballina, Brisbane, Sydney, Melbourne and Canberra. Today’s one-hour hearing began at 8am and questioned only Steadfast.

The committee will present its final report by November 19.