Brokers will decide whether it is feasible to continue providing services in the NSW builders’ warranty scheme when the commission-based remuneration system is phased out from April 3, the National Insurance Brokers Association (NIBA) says.

The move, part of the NSW Government’s plan to turn around the loss-making Home Building Compensation Fund (HBCF), comes despite concerns raised by NIBA.

“Brokers will have to make their own decisions as to whether they will stay on,” NIBA CEO Dallas Booth told insuranceNEWS.com.au.

“My observation is brokers are now going to give this a very serious thought as to whether it’s viable to stay on.

“Brokers are keen to help and support their clients… but this business requires a lot of time and effort and brokers need to be remunerated for their work.”

NIBA objected to removing the commissions, citing the important role brokers play in the builders’ warranty scheme system.

“Brokers are extremely disappointed that their service to the HBCF is not being recognised and not being remunerated,” Mr Booth says. “Brokers provide significant support to make sure this process operates efficiently.”

A fee-for-service pricing model will take effect on April 3.