The fight over transparency in strata insurance has exposed a deep divide in the industry – one that consumer advocates say the New South Wales government can no longer afford to ignore.
The Australian Consumers Insurance Lobby (ACIL) and the Owners Corporation Network of Australia (OCN) have called on the government to move ahead with reforms after reports that PICA Group – Australia’s largest strata management company – threatened to withdraw its membership from the Strata Community Association (SCA) New South Wales.
The move comes as the SCA pushes to phase out commissions on strata insurance, a practice long criticised for creating conflicts of interest between strata managers and property owners.
For ACIL and OCN, the controversy underscores how fragile industry-led reform can be.
“When the largest strata manager in the country threatens to withdraw from its own professional body over transparency measures, it sends the wrong message to consumers, regulators and policymakers. It highlights why government leadership on this issue is essential,” they said in a joint statement.
Their remarks followed what they described as “obvious fear-mongering” in PICA’s recent public statements – specifically, claims that banning commissions could drive up costs for consumers. The advocates reject that view, arguing that insurers’ costs are already embedded in premiums and that commissions only obscure who benefits from those payments.
Both groups have aligned themselves with the SCA’s direction, calling its proposed reforms a necessary step toward rebuilding public trust.
“The SCA has shown leadership in moving the industry toward higher standards. Those efforts deserve recognition and support – not resistance from those who benefit from opaque practices,” the statement read.
ACIL and OCN also pointed to what they called “mounting evidence of malpractice” in the way strata insurance commissions are handled, adding that they are aware of cases currently under regulatory investigation.
The groups are pressing the NSW government and the NSW Strata and Property Services Commissioner to move forward with a full ban on commissions and introduce safeguards to prevent future conflicts of interest.
“The SCA needs more members who back transparency and professionalism,” the groups said. “PICA no longer supports that direction, now is the time for other strata managers to step up and fill its shoes – and show consumers that integrity and accountability truly matter.”
