New data collection and reporting requirements for general insurance intermediaries proposed by Federal Treasury have met with strong industry opposition.

Under the proposal, brokers, underwriting agents and insurers authorised by the Australian Prudential Regulation Authority (APRA) would need to report every six months on transaction-level data on contracts with direct offshore foreign insurers (DOFIs) as well as aggregated data on contracts with authorised insurers, Lloyd’s underwriters and DOFIs.

Data from the first reporting period of November 1 to December 31 would need to be submitted by February 26 next year.

Mark Radford, insurance partner at Colin Biggers & Paisley lawyers in Sydney, says what started last year as a valid idea to monitor business flowing offshore and advantage taken of new UFI exemptions under the Insurance Act has grown into a significant burden.

“It has been sprung on intermediaries,” he told insuranceNEWS.com.au.

National Insurance Brokers Association (NIBA) consultant John Hanks describes the proposal as arduous, and says brokers are hoping for substantial changes.

He says NIBA seriously questions the cost benefit of demanding a complete range of statistics from intermediaries that would duplicate what is being provided by insurance companies and Lloyd’s. Added to that, the proposed timeframe is unworkable.

“As it now stands, the cost of compliance would be prohibitive for smaller brokers particularly,” he told insuranceNEWS.com.au.

“We would suggest that we concentrate on brokers and intermediaries giving information on unauthorised foreign insurers where there is no statistical collection at the present time.”

Mr Hanks says complete systems changes and retraining would be necessary in order for intermediaries to report in APRA risk classes as proposed.