Premium funders and the National Insurance Brokers Association (NIBA) will continue to resist moves to extend consumer credit laws to small business, after the Federal Government deferred its decision on the matter.

The deferral follows consultation with the industry, in which premium funders told Treasury proposed amendments to the National Consumer Credit Protection Act would affect the pricing and risk of their products.

NIBA has raised concerns that supply and pricing will be affected when there is no evidence of problems with premium funding.

NIBA CEO Dallas Booth says half of all brokers’ clients use premium funding, and the association foresees an increased regulatory burden for brokers and premium funders from proposed changes to small business credit.

“The clients clearly want access to premium funding to ease their cashflow burden and we want a competitive market, with good supply at a reasonable price,” he told insuranceNEWS.com.au. “It was certainly our view that this could have had a detrimental effect on that.”

Insurance Premium Financiers of Australia Chairman Bob Dodd says 400,000 contracts are written each year and the industry will continue to press for no extra regulation.

“This product helps small business, particularly in affordability and cashflow, and we see no evidence in 20 years of operating this product of any issues or challenges that even suggest the product needs review,” he told insuranceNEWS.com.au.

The draft bill proposes anyone engaged in credit activities with small businesses – defined as manufacturers employing fewer than 100 people or other businesses employing fewer than 20 – will need a permit from the Australian Securities and Investments Commission. Permit-holders would have to be members of an external dispute resolution scheme.

Mr Dodd says premium funders are already covered by the Financial Ombudsman Service.