Was it the gradual easing of the capacity crisis or the threat of an Australian Competition and Consumer Commission investigation that prompted Royal & SunAlliance to loosen its iron grip on builders' warranty insurance? It's hard to tell, but builders are welcoming a new agreement between the insurer and the Housing Industry Association (HIA) that will ease the restrictions on builders.

The HIA has sealed the deal with R&SA and Aon, and says financially stable builders with a maximum turnover of $2 million a year will now be covered for double the business they were formerly. Approvals are also expected to be processed more quickly, although scrutiny of companies’ financial positions will still be carefully managed.

The HIA reportedly expects about 10% of builders to fail the test to have their warranty insurance limits increased.