I think the reason is not that relevant as the question is what happens when the OC can’t get insurance
What happens when you can’t get insurance is that you look at the reasons for that and adjust accordingly.
Once you have stablished that, exclusions and excesses could apply. For instance, if the strata scheme can’t get insurance because of mixed use, they could ask commercial premises to provide their own insurance.
And there is provision in the Act that if the use of a lot cause insurance premiums to be increased, then the owner of that lot can be asked to make up the difference
However, it is ironic that strata schemes are legally obliged to have insurance but insurance companies are not obliged to provide cover at any cost. That’s something Fair Trading could have a look at … just as soon as they appoint their next training wheels minister.