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Transparency Around Insurance

Monday, 23rd September 2013

Insurance and commissions is a topic that our executive committees are becoming interested in. Not surprisingly, given that for most it is the single largest expense in your scheme's budget.

Strata Plus is taking this opportunity to help you understand:
  • the terminology
  • what we do for you as your managing agent; and
  • steps we have taken to improve transparency around this matter.

Insurance operates in the framework of the Financial Services Regulation (FSR) legislation, which is regulated by Australian Securities Insurance Commission (ASIC).

As your strata manager, we can assist you in:

  • discussions as to whether legal insurance obligations are being met;
  • completion of any documentation to be used by the insurer in the assessment of the risk;
  • liaison between your scheme and the broker or insurer during the insurance renewal process; and
  • lodgement and monitoring of claims as they occur.

This is known as "dealing and arranging" to ensure that your scheme is insured and meets legislative obligations.  In turn, these functions are technically considered 'general advice' within the FSR legislation. 

So how have we dealt with this at Strata Plus?

Our strata managers are authorised representatives (ARs) registered with ASIC under a license of companies we consider look after our clients' best interests.  Being and AR enables the strata manager to perform these expected duties.

The Strata Management Agency Agreement we have with your scheme includes the insurance management services we provide.

  • Schedule A1 of the Agreement clearly reflects our obligations according to Schedule 6 Clause 6(f) of the Property Stock and Business Agents Regulations.
  • Schedule A2 sets out the related duties.
  • Schedule C together with item 6 on the front of the Agreement discloses whether commission or a fee is received.

The dollar amount of commission or broker fee received is provided in the documentation emailed to executive committee members as part of the insurance renewal process.  At Strata Plus we strive for trust and transparency, which is why we have also added a commission or brokerage fee disclosure to our Annual General Meeting template.  This will ensure that ALL owners are aware of the costs involved.

If you would like to discuss this further, please call the Strata Plus directors, David or Olivera on 9319 1899 or visit www.strataplus.com.au

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