Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Hansard source

Firstly, I would like to thank those senators who have contributed to this debate. The Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022 will establish a reinsurance pool for cyclones and related flood damage. The pool is backed by a $10 billion annually reinstated Commonwealth guarantee.

Access to affordable insurance is vital to the economic prosperity and resilience of Australians who live and work in northern Australia. This bill will deliver on the government's commitment to maximising northern Australia's potential and to ensuring that Australians in cyclone prone areas have access to affordable insurance. The bill will improve the accessibility and affordability of insurance for households and small businesses with cyclone and related flood damage risk by reducing the cost of reinsurance. This is estimated to reduce premiums by $2.9 billion and cover more than 800,000 household, strata and small business property insurance policies in northern Australia.

The pool is also expected to increase competition by encouraging greater insurance participation, greater insurer participation in cyclone prone areas and support higher levels of insurance coverage for property owners. The savings generated by the pool will be targeted at policy holders with medium to high exposure to ensure that northern Australians facing the largest insurance affordability pressures receive the greatest benefits from the pool.

Following a direction from the government, the Australian Competition and Consumer Competition, the ACCC, has begun work to monitor and collect data to ensure that savings are passed on to policy holders and that the reinsurance pool is delivering on its intended outcomes. In addition, the Treasury will undertake a 12-month review of the pool.

Finally, I would like to thank the Senate Economics Legislation Committee for their consideration of the bill and for their recommendation that the bill be passed. I commend this bill to the Senate.