The insurance industry must help the Federal Government find ways to make insurance more affordable, the Insurance Council of Australia (ICA) regulatory update seminar has heard.

Parliamentary Secretary to the Treasurer Bernie Ripoll says the Government wants to consult with insurers to find solutions, while ensuring the burden of regulation does not become too heavy.

He told last week’s seminar the National Insurance Affordability Council (NIAC) will play a role co-ordinating flood risk and other disaster management, look at strata insurance in north Queensland and assess the effectiveness of the National Flood Risk Information Portal.

It comes after Prime Minister Julia Gillard last month announced the formation of the NIAC. ICA has been asked for input on representation on the council, according to CEO Rob Whelan.

The Government has indicated the NIAC will approach affordability via mitigation rather than subsidised premiums. Mr Ripoll says it will play an important role assessing the link between mitigation and premiums and co-ordinating flood risk management.

“This may involve assessing whether other Government initiatives, such as the National Flood Risk Information Portal, are enhancing the store of risk information and improving the quality of flood risk assessments in a way relevant to the insurance industry.”

Mr Ripoll says the Government will provide an appropriate transition period for the industry when adding unfair contracts terms to the Insurance Contracts Act, and will take account of the uniqueness of insurance contracts.

Shadow Financial Services Minister Mathias Cormann urged the industry to work with the Government on affordability, while ensuring the industry is efficient, transparent, competitive and responsive to community needs.

Senator Cormann told the seminar the higher cost of house and body corporate premiums continue to be raised with him by Coalition MPs, particularly those representing parts of Queensland and NSW, and the Coalition’s working group on the matter wants ideas from the industry.

“We need considered, well-thought-out ideas, backed up by research and recommendations,” he said.

ICA President Mark Milliner told the conference that after spending millions of dollars getting people back into their homes after hailstorms, cyclones and floods, it is not surprising to the industry that insurance affordability is an issue.

But he says any policy response must consider that insurance is good value and only a small proportion of the population lives in high-risk areas, while solving “the underlying problem of people living in vulnerable communities”.

Mr Milliner says the industry needs to understand the forces that influence it and plan for them without being given an increased regulatory burden.