Strata Community Association (SCA) Australasia will fast-track the mandatory introduction of improved insurance disclosure practices and has outlined measures to address complaints and conflicts of interest.

“We have listened to the concerns that have been raised over the past few days from within the sector and externally,” CEO Alisha Fisher said in a statement.

“SCA is committed to raising standards and improving practices among its members as it continually evolves its leadership role in ensuring confidence in the strata sector as a whole.”

SCA says it’s brought forward a mandatory requirement for members to implement a Best Practice Insurance Disclosure Guide to June 30 from January next year, with full enforceability under the complaints and conduct panel.

The group is appointing an independent panel chair and allocating additional resources and improved accessibility to the complaints process.

It’s starting the production of a “rigorous best practice guideline that clearly addresses conflicts of interest in the strata sector and other disclosures, outside of insurance”, and is offering extra support for members to have access to resources, advice and training to improve practice, where identified.

The national body is also supporting an independent review that SCA (NSW) will be conducting.

“SCA will be meeting with consumer, industry, government and regulatory stakeholders over the coming weeks and welcome suggestions to improve practices within the industry,” Ms Fisher said.

The SCA National Council, which includes representation from each state and territory, met yesterday in the wake of an ABC report last week that highlighted excessive fees charged by NSW-based Netstrata and associated entities. The report has led to wider criticism of practices within the industry.

The Best Practice Disclosure Guide, published in December, has been informed by an SCA-commissioned Deakin University study and recommendations in the Independent Review of Strata Insurance Practices Phase 1 paper produced by John Trowbridge.

The guide promotes simple and transparent disclosure of eight items as part of the quotation and invoicing process, clear comparisons with the previous year and communication steps.

The items include the base premium, emergency services or fire services levy, stamp duty, underwriting agency fee, broker fee, goods and services tax, commission and the allocation of remuneration.

The allocation includes details of the sharing arrangement between the strata manager and broker of total fees and/or commissions, and details of each party’s portion, expressed as a percentage and/or a total dollar value figure.

“Although there are industry norms that have developed around what type of arrangements are determined between brokers and strata managers and whether models include commissions or operate solely on a fee-for-service basis, SCA is not prescriptive in recommending one approach over another,” the guide says.

“SCA, through this guide, is pursuing a scenario where no matter what service model an SCA member chooses to engage in with their strata committee, they are able to transparently and easily describe its features and costs in a manner that is consistent across the whole strata industry.”