Home building compensation insurance decision-making under review
28 September 2022
SIRA has commenced a review of insurer eligibility practices in the home building compensation scheme.
The review will examine icare’s compliance with approved eligibility criteria when granting insurance policies.
It will be undertaken by forensic accountants, McGrathNicol, who will assess a sample of home building compensation policies from 2018 to 2022.
The review follows an initial assessment of the decision to issue insurance to Metricon and will cover issues such as deeds of indemnity and assets used to satisfy eligibility requirements.
icare is the sole provider of home building compensation in NSW. The criteria used to determine whether a builder is eligible for an insurance policy is set by icare and approved by SIRA in line with the Home building compensation (eligibility) insurance guidelines issued under the Home Building Act 1989.
The review is expected to be finalised by early 2023.
In December 2020, the Independent Pricing and Regulatory Tribunal recommended changes to the eligibility Insurance Guidelines. The findings of the review of insurer eligibility practices in the home building compensation scheme will inform those changes to improve regulation of the scheme.