Steadfast MD and CEO Robert Kelly says the Federal Government’s proposed cyclone reinsurance pool is too narrow and should be expanded to cover all natural perils.

The government’s bill passed the Senate yesterday, paving the way for the cyclone and related-flooding reinsurance pool to begin operation from July.

Speaking last week, Mr Kelly told insuranceNEWS.com.au that the recent east coast flood catastrophe had demonstrated a cyclone pool’s limitations.

He says in a lot of the affected areas “there is a paramount need for physical mitigation programs to be incepted and completed as expeditiously as possible”.

But he says having a disaster pool wouldn’t necessarily distract from the message on mitigation.

“It shouldn’t be a cyclone pool. It should be a weather event pool. Because candidly, what’s just happened wouldn’t be covered. None of what we had was a cyclone.

“Limiting it to named cyclone is very restrictive. When was the last cyclone that hit Lismore?”

Mr Kelly says there was political pressure to act on issues in north Queensland, but “nobody had a look over their shoulder”.

“It needs to be a natural perils pool. Having a pool won’t necessarily discourage mitigation, but that’s a good excuse for not making a decision.”

He believes strong action is also needed to prevent communities rebuilding in flood prone locations.

“We should look at the latest events in terms of, there is a massive amount of people that are not insured. There is a massive amount of people that shouldn’t rebuild where they’re going to rebuild.

“Logic would say ‘where is the rationale that says, yes, rebuild those houses there?’ Logic would also say that most of those properties weren’t insured for flood.”

Mr Kelly says buy-back schemes may not be necessary as “we’ve got Commonwealth land and you can plot swap”.

“Local government has to be curtailed by state and federal government law that says you cannot build on floodplains,” he adds.