The third meeting between the Federal Government and the Board of Insurance Council of Australia has resulted in clear wins for consumers and agreement between the Gillard Government and the insurance industry for further discussions on reform of flood related insurance.
The Assistant Treasurer, and Parliamentary Secretary David Bradbury who was also in the meeting, welcomed the release of the hydrologist"s reports for Toowoomba and the news that the remaining hydrologists reports will be finished and publicly available by the end of February.
"The Government has also reached agreement with the ICA to develop a mandatory definition of "flood" to be incorporated into the Insurance Contracts Act, and a plain-English, one page summary statement which will help ensure that consumers are aware of what their insurance policies cover them for.
"The ICA is consulting with its membership on the definition for "flood" and, once they have done so, I will consult with consumer groups to nail down a consensus definition which the Government will move to quickly adopt," Mr Shorten said.
"Both the standard definition and one-page summary statement are complicated issues and there is more work to be done, but it is encouraging to see the insurance industry express its willingness to embrace change."
A national flood-mapping database was also discussed and methods of funding the database will form the basis of future talks. Already the Government has offered to share the costs of the mapping with the insurance industry.
"The Government is very keen to see consumers offered the opportunity to make fortnightly payments to their insurance providers, rather than yearly or monthly payments. While this may be difficult for some insurers, each of whom have different payment software, it will improve the capacity of people to pay their fees," Mr Shorten said.
"I am also pleased to announce that the ICA will make a donation of $250,000 to Queensland legal assistance services providing legal advice to flood and cyclone victims.
"From my experience in the floods, I know that there will be a small number of policy-holders who will require legal advice and it is good to see the insurance industry acknowledge the process will go more smoothly if consumers have the benefit of professional advice."
The ICA and Minister Shorten have agreed to meet again on Friday 4 March to continue working on these issues.