The “one-size-fits-all” regulatory approach is inappropriate for brokers and incurs unnecessary costs, the National Insurance Brokers Association (NIBA) will tell the financial services inquiry.

“We have had concerns for a long time about this one-size-fits-all approach,” CEO Dallas Booth told insuranceNEWS.com.au.

“I think what we will certainly try to do is explain why there are issues and why we think there are deficiencies in that whole process.”

The current system prompts greater compliance and audit costs, which are passed on to consumers, he says.

Mr Booth argues the Future of Financial Advice reforms focus on financial planning and investment advice, but insurance brokers do not give such advice. “It’s a completely different conversation.”

NIBA has asked its 400 principal members for input on its submission to the forthcoming inquiry.

“We have to make sure we are putting in a strong submission that truly reflects the views of our members across the country,” Mr Booth said.

The deadline for submissions is March 31, with the inquiry’s final report due in November.

NIBA will also argue market conditions have failed in Far North Queensland, where government intervention may be required.

“I think there is a real question mark as to whether the insurance process can meet the property protection needs of some parts of Australia, particularly north Queensland,” Mr Booth said.

“If the insurance process is unable to meet that because of the way the insurance models work and simply because the community cannot meet the size of the pool necessary for the risk it carries, I think there has to be a broader conversation with government and others about alternative mechanisms to provide that protection.”

Public-private partnerships may be one option, although NIBA is not suggesting it has the answer, Mr Booth says.

“We know we had market failure for terrorism… so we had the fallback position of the [Australian Reinsurance Pool Corporation] terrorism pool for Australia.”