Legislative Council Fifty-Second Parliament, First Session (52-1) 52 1 Parliament of South Australia Legislative Council published Question Time Flood Insurance FLOOD INSURANCE The Hon. T.A. FRANKS Legislative Council FLOOD INSURANCE The Hon. T.A. FRANKS (14:57): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question regarding flood insurance. Leave granted. The Hon. T.A. FRANKS Legislative Council The Hon. T.A. FRANKS: As the minister and, I imagine, members of this chamber will be aware, Australia is subject to increasingly frequent and severe weather-related events, particularly flooding. The tragedy in Queensland, of course, has seen resultant economic devastation for many individuals and communities and will inevitably happen again if changes are not implemented promptly. Weather-related disasters are costing billions of dollars each year for Australians, and the economic costs are escalating, with a great proportion of these costs directly attributable to flooding. Despite this trend, our insurance system is grossly inadequate to deal with widespread flood-related devastation. Perhaps the biggest problem is that many living in areas traditionally prone to flooding are effectively denied access to insurance. Choice magazine has recently raised this as a concern and certainly its investigations have found that, of the policies offered by different insurers, only about half of those policies covered flood damage and, of course, once you got down to the fine detail what was constituted as flood damage had very strict mechanisms. My questions are: 1.	Can the minister advise the chamber what work her department has done to examine the dilemma of the confluence of the international trends for mortgage lenders not to finance a mortgage in high-risk areas, such as low-lying flood plains and of course the proposed Buckland Park subdivision, unless they are insured, with the increasing reluctance of insurance companies to insure property owners in such areas? 2.	Can the minister advise the chamber, regarding existing or proposed developments, such as Buckland Park, that have been identified as situated on a flood plain, what advice or warnings will be provided to future potential residents and business owners, etc. regarding their options for insurance? 3.	What steps will be taken to ensure that those who seek insurance for such events as floods will actually be able to access it? 4.	Can the minister detail any other methods that are proposed to reassure potential residents—for example, of Buckland Park—that they will not be left high but not so dry? The Hon. G.E. GAGO Legislative Council Minister for Regional Development Minister for Public Sector Management Minister for the Status of Women Minister for Consumer Affairs Minister for Government Enterprises The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises) (14:59): I thank the honourable member for her most important questions, and indeed the recent floods throughout Australia have certainly shone a light on some of the issues and problems associated with insurance policies. It is my understanding that matters to do with insurance now come under the Australian Consumer Law—so they are actually the responsibility of the commonwealth government—and bodies like the ACCC to do with competition across the industry and also ASIC being the regulator, particularly in relation to finance matters. So the responsibility for consumer issues around insurance is now a commonwealth responsibility, and that is a sensible thing, because most of the operators in the insurance sector are in fact— The President Legislative Council The PRESIDENT: Order! The cameraman will put the camera on the people on their feet. If you wave it around any more at people sitting down, I will have security remove you. The Hon. G.E. GAGO Legislative Council The Hon. G.E. GAGO: Thank you, Mr President. As I was saying, most organisations involved in the insurance sector operate at a national level rather than simply a state jurisdiction and, in fact, a number of them are international or have international links, so it is more appropriate that they are managed and regulated at a national level. The federal government has been reviewing its ministerial council forums. They are the councils where ministers from a range of different jurisdictions come together under different policy areas. In the past there has been a consumer ministerial council that has met a couple of times a year, and that is always a good opportunity to raise and talk about those consumer issues that are common across the nation and to look at strategies to deal with that nationally. There has been a recent decision made in respect of those councils, and I understand, if I recall correctly, that the consumer ministerial council will continue to meet at least a couple of times a year, so I was very pleased to see that. Some councils have been disbanded altogether as a means of the federal government streamlining its approach to national cooperation and coordination, so I am pleased that there is still a national forum for consumer affairs, because I think it is a very useful forum to meet and discuss these issues. I am absolutely confident that the issue of insurance will be placed on the next agenda. As far as I am aware, a specific meeting time has not been established yet, but I am confident that that will be one of no doubt many issues that are very much in our minds at the moment. I am quite confident that it will be discussed there, and I look forward to participating in those discussions to see if there are not ways to improve the transparency and also consistency of policies across the sector. Insurance policies can be extremely difficult documents to read, and it is very difficult for consumers to compare policies as well, because they are often written and couched in different terms so that it is difficult to compare apples with apples and, therefore, it is difficult for consumers to shop around and determine whether or not they are really getting good value for money. They are certainly issues which have been brought to my attention and which I am more than prepared to pass on at a federal level.