The Strata Community Association New South Wales (SCA NSW) has announced a significant change to the way strata insurance is managed and remunerated in the state.
From Jan. 1, 2026, SCA NSW members will begin phasing out insurance commissions in their management contracts, moving instead to a fee-for-service model.
This transition is expected to reshape the relationship between strata managers, property owners, and insurers across New South Wales.
Under the new policy, SCA NSW members issuing new standard management contracts will no longer be able to accept commissions on insurance products.
This change will apply to both SCA NSW’s standard contract templates and any custom agreements used by members.
The association’s leadership says the reform is intended to increase transparency and align with evolving expectations in the sector.
“The decision to make this phased transition in relation to insurance commissions has not been made lightly, or quickly. Undertaking this reform is about delivering transparency, trust, and showing leadership,” said Robert Anderson, president of SCA NSW.
Anderson also noted that the change is designed to provide clarity and accountability for property owners, while offering business certainty for managers.
“For owners and committees, this reform will deliver transparency, accountability, and pricing simplicity,” he said. “For managers and their businesses, it will deliver certainty, business sustainability, and improve trust and credibility with clients.”
Historically, strata managers have received commissions as part of the insurance supply chain. The new model will see these commissions replaced by direct fees for service and an expansion of agreed services, with terms negotiated in consultation with clients.
SCA NSW commissioned independent research and consulted widely with stakeholders before finalising the decision.
The Australian Consumers Insurance Lobby (ACIL) has welcomed the move, describing it as a step toward clearer pricing and improved alignment with owners’ interests.
ACIL chairperson Tyrone Shandiman said: “The key now is closing loopholes – particularly related-party arrangements – and making sure all financial benefits are captured by the rules, disclosed transparently, and that any savings are passed through to owners.”
ACIL also called for comprehensive controls to prevent conflicts of interest, particularly in cases where commission income could be redirected through related-party entities. The group emphasised that reforms must not simply shift conflicts elsewhere in the remuneration structure.
The commission phase-out coincides with a suite of new legislative reforms in NSW, which took effect on July 1.
These reforms include enhanced transparency in contract terms, new reporting obligations for strata managers, and the integration of sustainability measures into annual general meetings.
Strata managers are now required to provide detailed written reports to owners corporations every six months, outlining contractual tasks and activities.
While consumer groups have largely supported the changes, some industry leaders have expressed concern about the financial impact on strata management businesses.
Bobby Lehane, CEO of PICA Group, warned that removing insurance commissions could significantly affect operating margins in a sector already facing profitability challenges.
According to a PICA survey, property owners are divided:
NSW has over 91,000 strata schemes, with more than 1 million lots and a total insured property value of $486 billion.
