The MFAA is urging all brokers to support its lobbying efforts to stop proposed professional indemnity insurance legislation, which, if passed, will be a significant cost for broker businesses and could harm broker/client relationships.
The proposed changes are being put forward by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) in relation to Verification of Identity requirements on property transfers. ARNECC is proposing an increase of professional indemnity insurance to $20 million in the aggregate, from a current figure of $2 million per claim and up to $6 million in the aggregate.
However, Siobhan Hayden, the chief executive of the MFAA says the industry standard of $2 million in the aggregate is not only sufficient, but a major increase such as the one proposed will be a significant cost burden to many broker businesses and could harm their client relationships.
“This proposed requirement has no basis in fact as it does not reflect any existing claims and flies in the face of the requirements our industry regulator ASIC expects. In addition, the insurance industry is as yet unable to quote a premium at this level. This is reflective of the non-consultative approach this body has taken,” she said.
“Our industry is proudly based around small business owners and this would deliver a real cost impact to their livelihood. The change would force many to have to take their customers into a banking branch for identification purposes which is a direct threat to the customer competition that finance brokers offer Australians.”
The MFAA is now calling on all brokers to add their voice to the lobbying efforts by communicating with their local state parliamentary representatives.
To make this easier for brokers, the MFAA has provided a draft broker message
to the Government minister representatives, which can be downloaded from the MFAA’s website
, filled in by brokers and emailed to their local State and Federal minister.
“We are asking both MFAA and FBAA brokers to use the template and deliver a clear message that the finance industry deserves more consultation on issues that impact the earning capacity of our brokers,” Hayden said.