A dramatic increase in regulation over the past decade has resulted in a $100 million annual compliance bill for the general insurance industry, according to Insurance Council of Australia Executive Director Alan Mason.

He told a NSW conference that larger insurers pay up to $20 million a year in ongoing costs while smaller companies (less than 500 employees) can expect annual bills of up to $5 million to keep on the right side of the law.

Senior managers and board members spend up to 25% of their working hours on compliance issues.

“There is a high level of complexity in insurance regulation,” Mr Mason said, adding that new regulations tend to compete with, rather than replace, existing rules.

“Since 1996, significant changes to the regulation of insurance have been initiated or introduced every year and this has a significant cumulative effect.”

Mr Mason has welcomed new inquiries into the level of regulation in NSW, Queensland and in the federal sphere. He hopes they will create a push to further implement the recommendations of the HIH Royal Commission.

These include reform of a number of “excessive” state taxes, the removal of overlaps between state and federal prudential regulation and extending insurance laws to cover discretionary mutual funds and direct offshore foreign insurers.