Strata Broker Review Raises Fresh Questions for Owners Corporations

The findings are significant because strata insurance is not a discretionary purchase for most schemes. It is a core financial and compliance obligation, often involving large premiums, complex building risk, shared decision-making and competing interests between owners, managers, brokers and authorised representatives. When the process is unclear, committees may struggle to understand who is acting for whom, how parties are paid, and whether the recommended policy is genuinely suitable for the building.

The review examined seven brokers and more than one thousand strata representatives. It resulted in nine breach determinations and two broker referrals to ASIC. Key concerns included weaknesses in representative agreements, remuneration disclosure, conflict-of-interest management, conduct oversight and compliance controls. For owners corporations, the practical message is straightforward: relying on a familiar renewal process is no longer enough.

This story also extends the broader national debate about strata insurance commissions and conflicted payments. Much of that debate has centred on strata managers, but the latest findings show that strata insurance brokers and their representative networks are equally important to the integrity of the placement process. Disclosure alone may not satisfy community expectations if committees cannot clearly see how conflicts are identified, managed and documented.

For strata committees and body corporate representatives, the next renewal should be treated as a governance exercise, not merely an annual invoice. Committees should ask for written terms of engagement, a clear explanation of the broker’s role, details of any representative arrangement, all commissions or fees, and a summary of why the recommended insurer and cover limits are appropriate. They should also record these discussions in meeting minutes so future owners can understand the decision pathway.

There is also a cost-control angle. Better oversight does not always mean choosing the cheapest policy. It means comparing the premium, excesses, exclusions, claims service, building defects position, catastrophe exposure and sums insured as a whole. For higher-risk buildings, especially those with defects, flood exposure or repeated claims, committees may need earlier renewal planning and more specialist advice.

The immediate lesson is that transparency must be active, not passive. Owners corporations that ask sharper questions, document advice and seek genuine strata insurance comparison are better placed to secure suitable cover and maintain confidence among lot owners.