Calliden backflip derails insurance plan

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Calliden backflip derails insurance plan
Calliden backflip derails insurance plan
By Ben Butler

THE state government’s takeover of compulsory building insurance is in disarray after insurer Calliden backflipped on its plan to leave the Victorian market.

Under a plan put into action by the previous Labor administration, builders’ warranty insurance was to be taken over by the government’s Victorian Managed Insurance Authority.

The takeover of the controversial insurance product was prompted by the exit of dominant player Vero earlier this year, which in turn prompted Calliden to quit the market.

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But last week Calliden announced it had decided to stay in the Victorian market after all, because it had stabilised and believed there was ”continued demand for an alternative”.

”We are writing new business,” a Calliden spokesman told BusinessDay.

”There clearly is demand for an alternative and that is what we will provide.”

He said Calliden had told the VMIA and the government it intended to remain in the Victorian market.

”We’ve had no feedback from either the government or the VMIA on this announcement,” he said.

In October, an all-party upper house committee found the government’s management of builders’ warranty insurance, also known as domestic building insurance, was ”fragmented and poorly co-ordinated”.

Witnesses told the hearings the lack of protection offered by BWI, which only pays out if the builder dies, becomes insolvent or disappears, made the product a ”farce”, ”worthless” and ”unethical”.

The government should look into moving to a first-resort system similar to that operating in Queensland, the committee said in its report.

New Attorney-General Robert Clark said he was seeking briefings ”on the current state of the arrangements we have inherited from Labor and on the issues that need to be addressed, and I have asked for these latest developments to be included in those briefings”.

Source: www.smh.com.au