The Australian Competition and Consumer Commission says it is examining lobby group information that highlights poor conduct by some strata managers in arranging insurance.

The Australian Consumers Insurance Lobby (ACIL) has presented its concerns to the consumer commission and the Australian Securities and Investments Commission, giving examples that it says should be reviewed and asking the regulators to consider a wider investigation.

“We are continuing to engage with ACIL and examine information it has provided to consider how the Competition and Consumer Act may relate to the specific concerns ACIL has raised,” a consumer commission spokesperson told insuranceNEWS.com.au.

The Australian Securities and Investments Commission confirmed it received the information from ACIL but has not indicated whether it will pursue the issues.

“All reports give us valuable intelligence, but [we are] unable to investigate every matter brought to our attention. In a limited number of cases, we may formally investigate a report or tip-off if it meets our current priorities and enforcement criteria,” a spokesperson said.

Insurance consultant John Trowbridge, who last year completed an independent strata market review, has pushed for greater transparency across the industry.

Mr Trowbridge has recommended process improvements when brokers are appointed for strata insurance and has welcomed Strata Community Association (SCA) moves to improve disclosure.

There are cases in which brokers and strata managers’ combined charges, including fees and commissions, exceed competitive market rates, sometimes by large margins, he tells insuranceNEWS.com.au.

“In many such cases, the strata committee and the owners are not aware of the details of these arrangements. That is part of the reason why transparent disclosure needs to be pursued across the industry. It is also why the SCA has recently issued a new practice standard on disclosure for its members.”

Mr Trowbridge says the standard aligns well with his disclosure recommendations and is explicit about the disclosure of conflicts of interest and acting in body corporate clients’ best interests.

ACIL says in some cases strata managers have shifted property owners onto unreasonably high remuneration models, which may involve strata managers sharing 20% commissions and 20% fees with brokers, without full transparency.

Mr Trowbridge has recommended three extra steps when considering a change of broker for strata cover, including that the owners’ committee sign a formal letter of appointment for the new broker and give instructions, rather than a broker relying on a delegated authority.

“It is questionable whether the strata manager’s delegated authority on broker appointments extends to issuing a letter of appointment without genuine communication with the strata committee,” he said.

The Strata Community Association released its disclosure best practice guide in December and is holding education sessions around its implementation. After evaluation, it’s expected to be part of the association code of conduct from next year.