The National Insurance Brokers Association (NIBA) has called on the Tasmanian government to adjust its proposed state-run insurer, TasInsure, amid ongoing debate over the scheme’s implications for advice access, market function, and public-sector risk. In its submission to the TasInsure Discussion Paper and Preliminary Draft Bill, released for consultation in November 2025, NIBA said consumer outcomes will depend on how the scheme interacts with the existing intermediary market.
NIBA notes that neither the paper nor the draft bill explains whether TasInsure products will be available through insurance brokers. NIBA describes this as a significant omission for Tasmanian customers with more complex exposures, including small and medium enterprises, community organisations, and regional clients. NIBA cites evidence indicating that clients who use brokers are about twice as likely to be fully covered at claim time as those who purchase directly from insurers. It warns that if brokers are excluded from distribution, those segments “will miss out on professional advice, claims advocacy, and support for informed decision-making.” The submission argues that access to advice, claims support, and product comparison is important in managing underinsurance and coverage gaps, particularly in a state with varied business risks and natural peril exposure.
Alongside advice access, NIBA focuses on the Fire Services Levy (FSL) as a policy lever for premium relief. According to the association, the FSL currently adds about 28% to business insurance premiums. NIBA argues that abolishing or restructuring the levy could deliver measurable cost reductions for commercial policyholders and says this would avoid the operational complexity, capital requirements, and execution risk it associates with establishing a new state-owned insurer.
On the proposed operating model, NIBA recommends that TasInsure function as a last-resort or residual-market provider addressing clear instances of market failure, rather than operating as a broad-based competitor to private insurers on price. It cautions against including workers’ compensation within the scheme at this stage, referencing financial challenges reported in other state-based statutory classes. NIBA also urges the government to release detailed financial modelling, including stress tests under major-loss and catastrophe scenarios, before any legislation is finalised. It says transparency on funding, pricing, reinsurance, and capital backing will be important for market participants assessing the impact on competition and risk transfer. The association further recommends that TasInsure be required to join the Australian Financial Complaints Authority (AFCA), giving Tasmanian policyholders access to the same free, independent external dispute resolution as customers of private insurers.
The Tasmanian Liberal government has positioned TasInsure as a response to what it describes as sustained premium pressures and gaps in access for local policyholders. Announcing the release of the discussion paper and preliminary draft legislation in November 2025, Premier Jeremy Rockliff said: “TasInsure will be affordable, locally owned and built for Tasmanians. In the past few years, insurance premiums have skyrocketed. TasInsure will be a Tasmanian solution, at Tasmanian prices, and Tasmanian owned.”
The government has indicated that TasInsure is projected to save Tasmanian households about $250 a year and small businesses “thousands per year” on insurance costs. It is intended to operate on a not-for-profit basis, with any surplus to be retained or reinvested. Rockliff has linked the proposal to broader economic activity, stating that TasInsure “will make it easier for cafes, restaurants, wineries, breweries, and distilleries to turn a profit, employ more people, and continue to drive economic growth.” The government has engaged a specialised consultant to advise on the development, operating model, and governance structure for TasInsure. Feedback on the discussion paper and Preliminary Draft Bill closed on Jan. 9, 2026.
The Insurance Council of Australia (ICA) has raised concerns that establishing a state-owned underwriting entity in a high natural peril environment could increase the exposure of the public balance sheet. In its 2025 commentary on the TasInsure proposal, ICA said the plan “would put significant financial risk onto the public balance sheet while failing to do anything about the underlying causes of insurance pricing.” The council contends that governments should focus on risk reduction, tax settings, and regulation that influence underlying costs, rather than adding a new public insurer.
ICA notes that the Australian private insurance market channels about $40 billion a year from global reinsurance markets into the economy, supporting recovery after natural disasters. It warns that, in its view, heavily subsidised government schemes can shift catastrophe risk onto the public sector and lead to long-term fiscal liabilities. To illustrate potential exposure, ICA points out that about 98% of Tasmania’s land area is classified as bushfire-prone. It estimates that if the 1967 Black Tuesday bushfires occurred today, insured losses would total approximately $4.1 billion, currently borne by private capital under existing arrangements.
ICA also refers to overseas examples, including the United States National Flood Insurance Program, which it notes has left the US federal government with more than US$20 billion in unfunded debt even after US$16 billion in debt was forgiven in 2017. Mathew Jones, ICA general manager public affairs, said: “This proposal poses significant financial risk to Tasmanian taxpayers. Overseas examples show that taking risk on to the public balance sheet is a bad idea, particularly when that risk is expected to grow as a result of climate change.”
As an alternative to a state-owned insurer model, ICA is advocating changes to state taxes and levies, along with increased investment in physical risk reduction. “The most immediate way the next Tasmanian government can improve insurance affordability is to abolish stamp duty and the Fire Services Levy (FSL) on insurance products, which would provide quick and targeted relief for families and businesses,” the council has stated.
In 2024–25, the Tasmanian government collected more than $150 million in insurance-related taxes, with around $631 million forecast over the four years from 2024–25. ICA argues that reforming these charges, combined with targeted mitigation spending, would support affordability while retaining private-sector capital at scale. Jones said: “To address the issues, underlying insurance pricing government and industry must work together. The insurance industry is committed to progressing this issue in good faith with the next Tasmanian government.”
With the consultation phase completed, insurers, brokers, and reinsurers across Australia are monitoring how the TasInsure proposal develops and how any final model will interact with private capacity, distribution channels and national regulatory frameworks. Key questions for the market include whether TasInsure will be confined to residual or hard-to-place risks, how catastrophe exposure will be funded and reinsured, how intermediated distribution and advice will be treated, and whether tax and levy reforms will proceed alongside any new scheme. For insurance professionals, the eventual structure of TasInsure is likely to shape competition, pricing strategies, product design, and risk appetite in Tasmania, and may inform future discussions on public-sector participation in general insurance in other Australian jurisdictions.
