Treasury will consider requiring previous-year premiums to be displayed on renewal notices and other transparency measures as part of its response to the Northern Australia Insurance Premiums Taskforce and last year’s Senate inquiry.

As revealed in a Breaking News bulletin before Christmas, the Federal Government has finally ruled out such options as a reinsurance pool or mutual insurer to compete with insurers. But it does plan to release proposals this year that would remove the insurance exemption from laws covering unfair contract terms.

Canberra has ruled out intervening directly in the insurance market, and is instead focusing on accountability and improving consumer understanding.

The Senate’s general insurance inquiry made 15 recommendations in a report last year, including that the Government respond to the previous Northern Australia Insurance Premiums Taskforce, which released its findings in March 2016.

The Government says it accepts the taskforce view that mitigation to limit cyclone damage is the only way to reduce premiums on a sustainable basis in the north, but again rejects a Productivity Commission proposal to reduce disaster recovery spending in favour of mitigation work.

The response urges the Insurance Council of Australia (ICA) to speed a code of practice update and tasks the Australian Securities and Investments Commission and the industry with working on measures to assist consumers.

“The Government’s response to the taskforce is fair, reasonable and balanced,” ICA CEO Rob Whelan said. “It provides clear direction for government policy, and the insurance industry is already well advanced on many of the key recommendations.”

Suncorp Insurance CEO Gary Dransfield has welcomed the decision to rule out a reinsurance pool or mutual, but warns that any changes to unfair contract terms “need to be developed carefully and in close consultation with the industry”.

He says without consultation there is a risk that customer experiences would be jeopardised and unnecessary complexity added to insurance processes.

The Government says it has already acted on several taskforce recommendations, including establishing a comparison website for north Queensland and funding an Australian Competition and Consumer Commission inquiry.

It urges WA, Queensland and the NT to abolish inefficient stamp duties, strata commissions and other levies on premiums.

See ANALYSIS.