A coinsurance panel comprising of Allianz, IAG and QBE is being established in NSW to provide a new insurance pool that will help struggling non-profit community organisations obtain public liability insurance cover.

ICA President and QBE MD Raymond Jones said the pool, which had been made possible by the NSW Government’s reforms, would be offered only to those community groups whose risk is “predominantly in NSW”.

“The panel will consist of underwriters, claims and other staff provided by the three companies. It is intended to assist not-for-profit groups in areas such as cultural and recreational services, and other community services,” Mr Jones said.

Community groups, which will be able to claim up to $10 million cover, will be able to access the pool through insurance brokers or directly through ICA. But they will not be eligible unless they have a not-for-profit tax status, their members are predominantly volunteers and they do not distribute profits to members. Organisations with a poor loss history, unduly high risk or overseas exposures will also fail to qualify for assistance.

Because the proposal involves pooling the resources of three competitors, ACCC approval will be required, and discussions with the regulator have commenced.

IAG CEO Michael Hawker said that while the pool would not solve the problems faced by every community group, it should provide “a sustainable solution” for many eligible clubs and associations. He also expressed concerns about inconsistencies between the states, saying these could lead to “jurisdiction shopping”.

Allianz Australia MD Terry Towell described the scheme as offering “a new insurance option that will support community activities which have long been a part of the Australian way of life”.

ICA Deputy Chief Executive Philip Maguire said that while the new pool will help not-for-profit groups in the short-term, “there is no substitute for effective and consistent law reform”.

ICA also announced last week that insurance companies are compiling the latest statistics to give governments and APRA a clearer indication of the number and cost of public liability claims.