Federal Labor MP Graham Perrett has criticised the rate of tax on strata title insurance properties in north Queensland.

The member for Moreton in Brisbane spoke out at the National Insurance Brokers Association convention on the Gold Coast last week.

He says concerns arose after last year’s disasters led to steep rises in premiums.

“In particular, those living in strata title complexes in Far North Queensland have had a very tough time of late,” he said.

Mr Perrett says the flood inquiry he chaired recommended the Queensland Government implement a 12-month moratorium on stamp duty for strata title insurance in the state’s far north.

“To date, this has unfortunately not occurred,” he said.

He says stamp duty on residential strata title insurance in Queensland is 7.5% of the premium, charged after GST has been applied, “with cumulative charges representing a larger impost than the 17.5% of combined taxes”.

Submissions to the inquiry were concerned about the “tax on tax” effect, he said. “These two taxes combine to add nearly one-fifth of the actual premium cost.”

The inquiry also received evidence of “a weakness in the self-regulation of claims-handling in the general insurance industry, particularly when the industry was exposed to such a high volume of claims” after the 2011 catastrophes.

“The natural disasters of 2011 also highlighted that consumer rights were not adequately protected by their insurance contracts,” Mr Perrett said.

“That is why the committee recommended that consumer protections be increased for insurance policyholders, particularly when entering into insurance contracts, during claims-handling processes and when pursuing insurance disputes.”

Mr Perrett says one positive from the disasters is that more households now have flood insurance and natural disaster claims will be assessed in the same time as other claims, following changes to the General Insurance Code of Practice.

“These demands will no doubt place staff under pressure but you have a highly skilled and professional workforce and I know they will cope,” he said.

Natural disasters will continue to challenge the industry, Mr Perrett says.

“Before the floods and natural disasters of 2010/11, premium growth was driven predominantly by socioeconomic factors: population growth and concentration and the rising value of assets.

“But with the increased frequency of natural disasters the insurance industry will need to manage the expected boost in demand for general insurance over the medium to long term with the increase in price for coverage, given the higher volatility in claims.”