DEEP DIVE: Strata Insurance Reforms Reshape NSW and Victoria

Australia's strata insurance sector is entering a new era. As regulatory reforms take hold in New South Wales and loom in Victoria, the industry is undergoing its most transformative period in decades; one defined by transparency, collaboration, and professionalism.

As regulatory reforms roll out across New South Wales and loom in Victoria, strata managers and brokers alike are being called to embrace a new era of transparency, professionalism, and partnership.

While change can be unsettling, industry leaders agree the reforms are a defining opportunity – not just to improve compliance but to elevate trust and value for owners and residents.

“These reforms are not just regulatory adjustments," says

Australia's strata insurance sector is entering a new era. As regulatory reforms take hold in New South Wales and loom in Victoria, the industry is undergoing its most transformative period in decades; one defined by transparency, collaboration, and professionalism.

As regulatory reforms roll out across New South Wales and loom in Victoria, strata managers and brokers alike are being called to embrace a new era of transparency, professionalism, and partnership.

While change can be unsettling, industry leaders agree the reforms are a defining opportunity – not just to improve compliance but to elevate trust and value for owners and residents.

“These reforms are not just regulatory adjustments," says CHU CEO, Kimberley Jonsson. "They’re about restoring clarity and confidence. Brokers and strata professionals who lean into education and transparency will emerge stronger.”

NSW: A New Model

The NSW strata sector is setting the tone nationally. Under reforms championed by the Strata Community Association (NSW), commissions on strata insurance policies will be phased out. The move is designed to bring the industry in line with broader consumer expectations of transparency.

Robert Anderson, SCA NSW President, says the decision is about “leadership, integrity, and trust”. He explains, “We’ve listened to owners, managers, and consumer groups who told us they want more transparency and simpler pricing.

"Phasing out commissions is the next logical step after mandatory disclosure. It ensures strata management remains a trusted profession.”

The shift will see strata managers adopt a fixed or fee-for-service model or a blend of both, to replace the commission-based structure of remuneration previously supporting the strata insurance process.

According to Anderson, owners will gain clear, upfront visibility of what they are paying for. "By removing commissions, there are no more grey areas," he says, "just transparent fees that reflect the real work strata managers do.”

The implications for brokers are significant. The reforms, paired with federal “informed consent” requirements are effective from 10 July 2025, mean brokers must now obtain explicit consent from clients before receiving commissions for personal advice.

Many strata schemes, which qualify as retail for clients, fall directly within this scope. Mitchell Lipscombe, COO at BAC Insurance Brokers, says brokers need to adapt quickly:

“Disclosure alone doesn’t equal understanding, and consent to this remuneration must now be explicitly agreed rather than assumed,” he says.

“Considering the nuances of strata insurance distribution, brokers must structure their method of gaining consent in a way that fits the committee-led nature of Owners Corporations.”

Leading the conversation

The reforms have a common thread: disclosure. From 3 February 2025, strata managers in NSW have been required to comply with stricter disclosure rules covering commissions, training expenses and supplier connections.

As Lipscombe notes, “These changes mean strata managers will increasingly rely on brokers to supply accurate, itemised premium and fee information for reporting.”

The days of one-line premium summaries are over. Brokers are now required to provide full cost transparency, not just to comply, but to empower Owners Corporations to make informed, confident decisions.

Anderson sees this as a moment for collaboration rather than friction. “Managers and brokers will be able to showcase their value more clearly, with transparent fees that reflect their professional expertise,” he says.

“With strong communication and support, this transition can strengthen client relationships.” Anderson concurs: “When managers, brokers, and owners work together with transparency and integrity, everyone wins.”

Policy Impacts

The next wave of reforms goes beyond fee models to reshape how strata communities interact with risk. As Lipscombe explains, “Mandatory committee training will really ignite additional engagement in the process.

"Committees will start asking deeper questions about sum insured, sub-limits, and deductibles. This presents an opportunity for brokers to demonstrate their value proposition in what is often viewed as a transactional segment of the general insurance market.”

The ripple effect of these reforms will likely be more tailored coverage. With informed clients scrutinising policy terms, brokers who can articulate the reasoning behind coverage limits and deductibles will stand out.

This view is shared by Jonsson. “It’s great that owners and Strata Committees are asking more questions, as we see a direct correlation between owners who are actively involved in their strata affairs and the health of those strata communities.”

At the same time, the reforms will encourage proactive building maintenance, a factor increasingly linked to pricing. From 1 July 2025, Owners Corporations had an enhanced statutory duty to repair and maintain common property, and by April 2026, they must produce 10-year capital works fund plans in a prescribed format.

Well-managed schemes will continue to enjoy more competitive premiums; poorly maintained ones risk exclusions or higher deductibles.

Jonsson notes that the reforms come at a time when the industry is stabilising after years of volatility. “After several years of a hard market and limited insurer capacity to take on new risks, we’re now seeing inflation ease and new players enter the market. That’s healthy competition.”

A dual regulatory challenge

For brokers, compliance under the new system will be more complex; but also, more purposeful. Strata insurance sits at the intersection of two regulatory regimes: ASIC’s financial services framework and evolving state-based strata laws.

“This dual lens demands flexibility,” says Lipscombe. “It’s not just about meeting stricter disclosure and consent rules. Brokers must also collaborate with strata managers who are facing heightened reporting and governance standards.”

Brokers who approach compliance as an opportunity, rather than an administrative hurdle, stand to gain. “By helping strata managers respond to their new obligations, brokers can ease the compliance burden and create a better consumer experience,” he says.

The message from CHU is similar. Jonsson believes brokers are uniquely positioned to lead through education and partnership: “These reforms formalise the good habits already practiced by the best in our industry," she says. "Those who work closely with strata managers, insurers and owners to deliver clarity, build understanding, and strengthen resilience.”

Lessons for Victoria

As NSW implements its phased changes through 2025–26, attention is turning south. Victoria is expected to introduce its own reforms, likely mirroring NSW’s emphasis on transparency and accountability.

Anderson says the key lesson from NSW is that reform works best when it is phased in, backed by consultation, and supported with strong education for members and owners. “That model ensures changes are practical, fair, and deliver real benefits,” he says.

Victorian strata managers and brokers should anticipate a similar approach; clearer remuneration models, enhanced disclosure expectations and tighter governance obligations.

For brokers, this means preparing early by aligning processes and communication frameworks to the standards emerging in NSW.

Lipscombe says a proactive stance is critical: “These reforms are an opportunity for brokers to reset relationships with Owners Corporations, shifting from transactional placement to transparent and trusted risk advice. In an environment where half of Australians may live in strata by 2050, that repositioning will be vital.”

Industry Resilience and Emerging Risks

Beyond regulation, Jonsson highlights the resilience and growth of Australia’s strata ecosystem. With over 368,000 strata schemes and $1.4 trillion in insured assets, it’s a cornerstone of modern housing.

“Strata is the answer to Australia’s housing affordability challenge,” she asserts. “By 2040, we estimate that half of greater Sydney will live in strata, and as Mitchell suggests, that trend is expected to extend across the country. We need to make sure the systems supporting that, including insurance, are strong and sustainable.”

Education is the future

The convergence of reform, innovation and consumer expectation has created a defining moment for professional education.

Recognising this, CHU partnered with the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to develop a new short course on strata insurance; designed to help brokers, strata managers and insurers navigate this evolving environment with confidence.

Jonsson sees education as the industry’s most powerful tool for positive change: “We wanted to support and upskill strata insurance professionals with the knowledge to navigate this growing and unfamiliar area with confidence, not confusion,” she says.

“We believe that Strata professionals who can lead conversations with the latest knowledge and skills are serving their clients in the best possible way and are driving the whole industry forward.”

The course explores practical scenarios around disclosure, remuneration, and compliance while equipping participants to communicate complex insurance concepts to strata committees and owners in plain language.

It also reinforces CHU’s broader commitment to collaboration and transparency; values at the heart of the company’s 47-year legacy in the strata market.

“Education is empowerment,” Jonsson confirms. “By investing in learning, we’re investing in the credibility and sustainability of the strata insurance industry. That’s what this course is all about – ensuring brokers and strata managers are ready for the next chapter.”

Stay ahead of reform, innovation and rising expectations. Complete The Building Blocks of Strata short course and strengthen your capability – and your clients’ trust.

 Sign up now

 

n. "They’re about restoring clarity and confidence. Brokers and strata professionals who lean into education and transparency will emerge stronger.”

NSW: A New Model

The NSW strata sector is setting the tone nationally. Under reforms championed by the Strata Community Association (NSW), commissions on strata insurance policies will be phased out. The move is designed to bring the industry in line with broader consumer expectations of transparency.

Robert Anderson, SCA NSW President, says the decision is about “leadership, integrity, and trust”. He explains, “We’ve listened to owners, managers, and consumer groups who told us they want more transparency and simpler pricing.

"Phasing out commissions is the next logical step after mandatory disclosure. It ensures strata management remains a trusted profession.”

The shift will see strata managers adopt a fixed or fee-for-service model or a blend of both, to replace the commission-based structure of remuneration previously supporting the strata insurance process.

According to Anderson, owners will gain clear, upfront visibility of what they are paying for. "By removing commissions, there are no more grey areas," he says, "just transparent fees that reflect the real work strata managers do.”

The implications for brokers are significant. The reforms, paired with federal “informed consent” requirements are effective from 10 July 2025, mean brokers must now obtain explicit consent from clients before receiving commissions for personal advice.

Many strata schemes, which qualify as retail for clients, fall directly within this scope. Mitchell Lipscombe, COO at BAC Insurance Brokers, says brokers need to adapt quickly:

“Disclosure alone doesn’t equal understanding, and consent to this remuneration must now be explicitly agreed rather than assumed,” he says.

“Considering the nuances of strata insurance distribution, brokers must structure their method of gaining consent in a way that fits the committee-led nature of Owners Corporations.”

Leading the conversation

The reforms have a common thread: disclosure. From 3 February 2025, strata managers in NSW have been required to comply with stricter disclosure rules covering commissions, training expenses and supplier connections.

As Lipscombe notes, “These changes mean strata managers will increasingly rely on brokers to supply accurate, itemised premium and fee information for reporting.”

The days of one-line premium summaries are over. Brokers are now required to provide full cost transparency, not just to comply, but to empower Owners Corporations to make informed, confident decisions.

Anderson sees this as a moment for collaboration rather than friction. “Managers and brokers will be able to showcase their value more clearly, with transparent fees that reflect their professional expertise,” he says.

“With strong communication and support, this transition can strengthen client relationships.” Anderson concurs: “When managers, brokers, and owners work together with transparency and integrity, everyone wins.”

Policy Impacts

The next wave of reforms goes beyond fee models to reshape how strata communities interact with risk. As Lipscombe explains, “Mandatory committee training will really ignite additional engagement in the process.

"Committees will start asking deeper questions about sum insured, sub-limits, and deductibles. This presents an opportunity for brokers to demonstrate their value proposition in what is often viewed as a transactional segment of the general insurance market.”

The ripple effect of these reforms will likely be more tailored coverage. With informed clients scrutinising policy terms, brokers who can articulate the reasoning behind coverage limits and deductibles will stand out.

This view is shared by Jonsson. “It’s great that owners and Strata Committees are asking more questions, as we see a direct correlation between owners who are actively involved in their strata affairs and the health of those strata communities.”

At the same time, the reforms will encourage proactive building maintenance, a factor increasingly linked to pricing. From 1 July 2025, Owners Corporations had an enhanced statutory duty to repair and maintain common property, and by April 2026, they must produce 10-year capital works fund plans in a prescribed format.

Well-managed schemes will continue to enjoy more competitive premiums; poorly maintained ones risk exclusions or higher deductibles.

Jonsson notes that the reforms come at a time when the industry is stabilising after years of volatility. “After several years of a hard market and limited insurer capacity to take on new risks, we’re now seeing inflation ease and new players enter the market. That’s healthy competition.”

A dual regulatory challenge

For brokers, compliance under the new system will be more complex; but also, more purposeful. Strata insurance sits at the intersection of two regulatory regimes: ASIC’s financial services framework and evolving state-based strata laws.

“This dual lens demands flexibility,” says Lipscombe. “It’s not just about meeting stricter disclosure and consent rules. Brokers must also collaborate with strata managers who are facing heightened reporting and governance standards.”

Brokers who approach compliance as an opportunity, rather than an administrative hurdle, stand to gain. “By helping strata managers respond to their new obligations, brokers can ease the compliance burden and create a better consumer experience,” he says.

The message from CHU is similar. Jonsson believes brokers are uniquely positioned to lead through education and partnership: “These reforms formalise the good habits already practiced by the best in our industry," she says. "Those who work closely with strata managers, insurers and owners to deliver clarity, build understanding, and strengthen resilience.”

Lessons for Victoria

As NSW implements its phased changes through 2025–26, attention is turning south. Victoria is expected to introduce its own reforms, likely mirroring NSW’s emphasis on transparency and accountability.

Anderson says the key lesson from NSW is that reform works best when it is phased in, backed by consultation, and supported with strong education for members and owners. “That model ensures changes are practical, fair, and deliver real benefits,” he says.

Victorian strata managers and brokers should anticipate a similar approach; clearer remuneration models, enhanced disclosure expectations and tighter governance obligations.

For brokers, this means preparing early by aligning processes and communication frameworks to the standards emerging in NSW.

Lipscombe says a proactive stance is critical: “These reforms are an opportunity for brokers to reset relationships with Owners Corporations, shifting from transactional placement to transparent and trusted risk advice. In an environment where half of Australians may live in strata by 2050, that repositioning will be vital.”

Industry Resilience and Emerging Risks

Beyond regulation, Jonsson highlights the resilience and growth of Australia’s strata ecosystem. With over 368,000 strata schemes and $1.4 trillion in insured assets, it’s a cornerstone of modern housing.

“Strata is the answer to Australia’s housing affordability challenge,” she asserts. “By 2040, we estimate that half of greater Sydney will live in strata, and as Mitchell suggests, that trend is expected to extend across the country. We need to make sure the systems supporting that, including insurance, are strong and sustainable.”

Education is the future

The convergence of reform, innovation and consumer expectation has created a defining moment for professional education.

Recognising this, CHU partnered with the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to develop a new short course on strata insurance; designed to help brokers, strata managers and insurers navigate this evolving environment with confidence.

Jonsson sees education as the industry’s most powerful tool for positive change: “We wanted to support and upskill strata insurance professionals with the knowledge to navigate this growing and unfamiliar area with confidence, not confusion,” she says.

“We believe that Strata professionals who can lead conversations with the latest knowledge and skills are serving their clients in the best possible way and are driving the whole industry forward.”

The course explores practical scenarios around disclosure, remuneration, and compliance while equipping participants to communicate complex insurance concepts to strata committees and owners in plain language.

It also reinforces CHU’s broader commitment to collaboration and transparency; values at the heart of the company’s 47-year legacy in the strata market.

“Education is empowerment,” Jonsson confirms. “By investing in learning, we’re investing in the credibility and sustainability of the strata insurance industry. That’s what this course is all about – ensuring brokers and strata managers are ready for the next chapter.”

Stay ahead of reform, innovation and rising expectations. Complete The Building Blocks of Strata short course and strengthen your capability – and your clients’ trust.

Sign up now