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We often have requests to extend policy periods to align with AGMs or to provide a 12-month policy for the new phases of staged developments. In recent days we have received clarification from the major Strata Insurers about their position on extending policies beyond their normal 12-month period. All but one of the major Strata Insurers has confirmed they can no longer extend a policy beyond 12 months.
All strata policies we place on behalf of your Bodies Corporate include Voluntary Workers cover, which provides a benefit payable in the event of death.
Except for one insurer, Strata Insurers do not have an Australian Financial Services Licence to sell life insurance. This means they can provide insurance policies with a death benefit on the proviso that the terms of the contract do not exceed one year (see below).
Without an Australian Financial Services Licence to provide life insurance, an insurer is not authorised to provide any insurance policies with a policy period exceeding 12 months.
In the event where a policy period needs to be changed, Insurers now can only do this by renewing the existing policy but on a short-term basis. Generally, the Insurers prefer a policy period of 6 months (at a minimum).
This will have implications for Bodies Corporate that are seeking to change renewal dates. Please reach out to your Honan Account Manager for specific advice about solutions for your situation.
Strata State Manager - Queensland
