Steadfast Group announces review after Four Corners report alleged brokers hid cheaper quote from rival
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Version 0 of 1. Major insurance brokerage says it will look into ‘inappropriate strata title insurance behaviours’ but denied brokers misled customers Steadfast Group will conduct a review into “inappropriate behaviour” after reports one of its brokers channelled work to a related entity when cheaper insurance was available, but the insurance brokerage rejected allegations it misled customers. The major insurance brokerage company and underwriter, which was featured prominently in the ABC’s Four Corners report on Monday, has denied wrongdoing, telling the ASX on Tuesday that it had already taken steps to improve transparency. “Steadfast board and management are committed to a competitive, transparent and fair marketplace; will not tolerate inappropriate behaviours; and will undertake a further review to identify and address inappropriate strata title insurance behaviours,” the company said on Tuesday. On Monday evening, Steadfast said all of its businesses operate independently and actively compete with each other. It refuted allegations that its brokers misled customers. Sign up for Guardian Australia’s breaking news email Sign up for Guardian Australia’s breaking news email The review comes amid a push by consumer advocacy groups for a government-directed public inquiry into the strata management industry that would examine remuneration models and the adequacy of regulations designed to protect apartment owners. “We reject any suggestion that our businesses operate unethically and, in particular, that Steadfast improperly channels any business to its related entities,” Steadfast said. The ABC program included a case study that allegedly showed a Steadfast-owned broker recommending a more expensive policy from a related entity, while hiding a cheaper quote from a rival insurer. The company has denied that financial arrangements between insurance companies, brokers and strata managers were driving up the cost of insurance for owners. Sign up to Morning Mail Our Australian morning briefing breaks down the key stories of the day, telling you what’s happening and why it matters after newsletter promotion The insurer, which writes more than half of Australia’s strata policies, has seen its share price slide by more than 15% this week, wiping more than $1bn from its market capitalisation by Tuesday afternoon. Four Corners focused part of its investigation on the opaque networks that could lead strata managers to act in the interest of corporate entities rather than the apartment owners they are meant to represent. The chair of the Australian Competition and Consumer Commission, Gina Cass-Gottlieb, told the ABC there should be a ban on paid commissions on strata insurance, saying undisclosed systems of payments mislead consumers. A group of consumer advocacy groups, including Choice and the Consumer Action Law Centre, said on Tuesday that a public inquiry was required to examine the strata industry’s governance, conflicted remuneration models and hardship and debt recovery practices. “It should shine a light on the significant financial and safety risks faced by consumers due to current industry shortcomings,” the group said. “This action is necessary to safeguard the interests of millions of Australians currently living in strata-titled properties, and to protect the interests of future strata owners.” |