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[Jimmy-T]

Productivity and Equality Commission report says phasing out insurance commissions for strata managers will save state millions.

[See the full post at: SM commissions ban to save $300m says report]

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[woodg62]

I can’t see how any savings will be made. If a SM is getting, say $5000 in commissions and that is stopped they will just raise their fees by that amount. In fact, our SM (who is very good) has already told us that if commissions are removed, they will be increasing their fees. The commissions are part of their income.

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[Jimmy-T]

I think the savings will be made when insurers have to be more competitive with their products and the premiums they charge, rather than their enticements for strata managers. Yes, the SMs may well increase their fees, not least by adding a “fee for service”, but at least that won’t be a raw precentage of the insurance premium.

It shouldn’t cost 10 times as much to negotiate insurance cover for a block with ten times as many apartments. Th blocks that will feel the most pain are the smaller ones where the fee for service is more than the commission based on a percentage.

As for the $300m – I guess that’s how much will be saved over the next ten years when money for nothing is taken out of the equation.

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[Quirky]

This saving prediction also presumes that the commission paid to insurance brokers will also be abolished. Hopefully, there will also be some attention paid to there only being 3 insurance companies that are insuring strata buildings. The plethora of insurance companies quoting for the mandatory insurance of an apartment building are mostly just subsidiaries of the 2 big insurers – and there is one independent insurer operating in the market.

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