Insurance Council of Australia Advocates for Structural Reforms to CSLR
Addressing Funding Pressures to Enhance Consumer Protection
0
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Insurance Council of Australia (ICA) has called for structural reforms to the Compensation Scheme of Last Resort (CSLR) to address growing funding pressures and enhance consumer protection.
This appeal comes in response to a Treasury consultation paper examining the role of professional indemnity insurance in compensation claims.
Designed to protect professionals against negligence claims, professional indemnity insurance does not cover fraud, criminal conduct, or systemic failures-categories that account for a significant proportion of claims currently entering the CSLR. Attempting to expand professional indemnity cover to respond to these issues would simply shift the problem from one group to another and add significant costs to premiums without meaningfully addressing the reasons for the CSLR's significant shortfall.
To put the CSLR on a sustainable footing and better protect consumers, the ICA's submission identifies three priority reforms:
Greater regulatory oversight of managed investment schemes, which are the primary driver of CSLR claims, including consideration of an ASIC-approved list of products eligible for retail distribution.
Restricting CSLR compensation to actual capital losses and introducing means testing to direct funds to those most in need.
Reviewing minimum coverage limits, which have been largely unchanged since 2008, to reflect current market conditions.
The ICA will continue to work with the Government and Treasury on reforms that improve the CSLR's long-term financial sustainability, including on the design and implementation of proposed reforms.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
In March 2026, the Australian Prudential Regulation Authority (APRA) took decisive action to address significant premium hikes in the commercial auto insurance sector. Responding to widespread industry concerns, APRA issued emergency regulations to freeze unjustified baseline premium increases exceeding 25%, pending external review. This intervention aims to protect independent transport operators and logistics enterprises from immediate financial strain. - read more
HESTA, a leading Australian superannuation fund, has announced a significant reduction in insurance fees, averaging 12% across all cover types. This change is set to take effect from 1 July 2026 and is part of a broader initiative to make insurance more accessible and affordable for its members. - read more
The Australian government has unveiled plans to significantly reduce the growth of the National Disability Insurance Scheme (NDIS), aiming to save $36.2 billion over the next four years. This decision marks the largest single savings measure in the 2026 federal budget. - read more
As 2026 unfolds, Australian insurers have identified three primary challenges: rising premium costs and shrinking insurability, ongoing cyber and data risks, and increasing difficulty in hiring and retaining skilled workers. These insights are drawn from industry feedback cited in Gallagher Bassett’s upcoming report, 'The Carrier Perspective: 2026 Claims Insights.' - read more
The Queensland Law Society (QLS) has announced a significant 15% reduction in professional indemnity (PI) insurance levies for the 2026/27 period. This decision, approved by the QLS Council in April 2026, is set to benefit legal practitioners across Queensland by lowering their insurance premiums. - read more
The Insurance Council of Australia (ICA) has called for structural reforms to the Compensation Scheme of Last Resort (CSLR) to address growing funding pressures and enhance consumer protection. This appeal comes in response to a Treasury consultation paper examining the role of professional indemnity insurance in compensation claims. - read more
No comments yet. Be the first to share your thoughts.