ICA submission warns current levy structure unsustainable as 2026-27 CSLR costs exceed sector caps by A$137m.
The Insurance Council of Australia has called for structural reforms to the Compensation Scheme of Last Resort, citing projected 2026-27 costs of A$137m ($98m). Financial advice complaints account for A$127m of the total, surpassing the annual levy cap for any single sector.
Current proposals suggest spreading levies across the broader financial services industry, but the ICA argues general insurance should remain exempt. The council contends general insurers have no link to the complaints driving costs and that consumers cannot access the CSLR for general insurance disputes.
The ICA recommended capping eligible compensation at actual capital loss, excluding hypothetical scenarios to reduce disputes. The submission outlines four principles, including matching funding obligations to causation and maintaining the CSLR as a last-resort mechanism.