THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said there had been an overwhelming public response to the Insurance Inquiry since it was launched last week.

“My office has already received over 150 survey responses and a number of submissions in relation to this inquiry and we anticipate that number to grow,” Ms Carnell said..

“While we are only in the early stages of the inquiry, it is clear the small business community supports the work we are doing in this area.”

The inquiry follows a growing number of complaints from small businesses who have either been denied insurance or priced out of the market.

“Over the coming months, we will be investigating the practices of the insurance industry that impact small businesses and examining whether small business insurance products are fit for purpose,” Ms Carnell said.

“I’m particularly concerned about a number of cases where small businesses with current insurance policies have been subjected to major changes that have reduced their coverage without their consent, and with no refund of premiums. Our inquiry will look at this in more detail and consider if these practices amount to Unfair Contract Terms.

“We remain very keen to hear from small and family businesses that have faced difficulties with their insurance provider," Ms Carnell said.

“I encourage these businesses to share their experiences by completing our online survey or emailing my office via This email address is being protected from spambots. You need JavaScript enabled to view it. by 30 August, 2020.

“We also welcome submissions from industry stakeholders, which can be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it. by 21 August, 2020.”

A final report is expected to be released in December.

www.asbfeo.gov.au

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ELECTRICITY networks in Victoria have today announced an extension of relief measures for customers impacted by COVID-19.

Under the voluntary extension, eligible customers will be able to access support for a further six-months to January 31, 2021.

This is the second extension of the proactive relief package announced by networks on April 2, 2020, and this modified package will allow small retailers to defer the payment of eligible network charges.

The extension applies to Victorian electricity networks CitiPower, Powercor, United Energy, Jemena and AusNet Services.

Gas networks in Victoria, New South Wales and South Australia also have extended support for small retailers to December 2020.

All networks in the National Electricity Market, outside Victoria, are continuing to work with the Australian Energy Market Commission (AEMC) on the proposed rule change to allow certain retailers to defer eligible network charges.

Energy Networks Australia CEO Andrew Dillon said electricity and gas networks around the country were again stepping up to support customers.

"Support is available – if any customer is having difficulty with energy bills, I urge you to contact your electricity or gas retailer," Mr Dillon said.

"Energy networks are also minimising the impact of planned outages on our customers when conducting critical works needed to keep the lights on and the gas flowing during these unprecedented times."

www.energynetworks.com.au

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AS LIFE INSURANCE awareness week and the Financial Services Council (FSC) life insurance summit comes to an end today, the key take outs from the week is that the sustainability of the industry is on a knife edge with the rise of mental health claims being a major contributing factor.

FSC senior policy manager for life insurance, Nick Kirwan said, “In Minister Jane Hume’s opening remarks, she outlined that the government was willing to consider allowing life insurers to pay for treatment as an early intervention measure, particularly in relation to mental health-related claims."

This week the FSC released life insurance claims data from 2019 confirming mental illness is now the highest cause of claim for total permanent disability (TPD) and the third highest for income protection. Together, life insurers paid $1.24 billion in 2019 to over 9,500 Australians for these mental health claims

“If this reform were to be legislated it would allow life insurers to reduce the cost of mental health claims, improving the sustainability of the industry and reducing the cost for life insurance customers," Mr Kirwan said.

“Early intervention helps consumers recover from mental health issues, and consumers that recover quicker in turn helps the industry manage its sustainability and affordability – it’s all linked.

“We want a healthy and sustainable life insurance sector with the three A’s for consumers: availability of products; affordability of cover; and assurance that every valid claim will be paid,” Mr Kirwan said.

Lifeline on 131 114, Beyond Blue on 1800 512 348.

About the Financial Services Council

The Financial Services Council (FSC) has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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AS AUSTRALIA  radically changes how we generate and use electricity, the 2020 Integrated System Plan (ISP) has been developed to provide a roadmap for our energy future.

The ISP provides a blueprint for strategic investments that are needed to support Australia's electricity transformation.

Energy Networks Australia CEO Andrew Dillon welcomed the release of the document today by the Australian Energy Market Operator (AEMO). Mr Dillon said the plan highlighted the critical role transmission would play.

"To handle the seismic shift expected in electricity generation by 2040, we will need targeted investment in key transmission connections," Mr Dillon said.

"Around the world, we're seeing countries embrace greater connectivity as part of managing the ever-increasing amounts of variable generation from renewables.

"The ISP shows that a more connected future makes sense for Australian energy customers too.

"The sheer scale of the energy transition in the National Electricity Market is outlined in the ISP with a predicted 200 per cent increase in household solar and batteries and a 63 per cent drop in coal generation by 2040."

Mr Dillon said this jump in variable generation and closure of synchronous plants would need to be carefully managed to ensure a strong and reliable electricity system.

"The ISP charts a path to managing the development of a more interconnected grid," he said.

"The priority for energy networks is ensuring these proposed developments are efficient and deliver customers a low-cost pathway to a more secure, affordable system.

"Networks will continue to deliver an efficient, reliable and affordable grid for customers."

About Energy Networks Australaia

Energy Networks Australia is the national industry body representing Australia's electricity transmission and distribution and gas distribution networks. Members provide more than 16 million electricity and gas connections to almost every home and business across Australia. 

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THE DETENTION of a Hong Kong-flagged vessel allowed to cart alumina along Australia’s coast amidst accusations of abuse and intimidation shows the Federal Government’s fundamentally flawed regulation of coastal shipping is leading to the extreme mistreatment of vulnerable workers and violation of their human rights, according to the Maritime Union of Australia.

The bulk carrier Unison Jasper was bringing alumina to the Tomago Aluminium smelter when it was detained by authorities in the Port of Newcastle following allegations that crew members were abused, intimidated and forced to sign contract extensions which would have kept them on board for up to 14 months, well beyond the legal maximum of 11 months.

The Unison Jasper had been operating under a temporary license issued by the Australian Government to undertake coastal shipping between the ports of Gladstone and Newcastle.

Massive underpayment of wages were discovered when the vessel docked in Brisbane earlier in July, resulting in crew members being paid US$93,000 they were owed. Once the vessel left port, the Burmese seafarers were allegedly intimidated by ship officers to hand back the wages in question to ship management. Another US$60,000 in owed wages has been uncovered by inspectors from the International Transport Workers’ Federation in Newcastle.

The MUA and ITF are working with agencies, including the NSW Police, Border Force, the Australian Maritime Safety Authority and the Port of Newcastle, to have the workers paid the wages they are owed and have them safely repatriated to their home country. The MUA believes that the captain is in no condition to sail the ship after himself being at sea for 14 months and that the entire crew should be replaced. 

MUA National Secretary Paddy Crumlin said, “What we have seen on this vessel — with seafarers intimidated, robbed of their wages, and forced to remain on board for up to 14 months — is an extreme form of exploitation that has no place in Australian waters, but risks becoming more common as authorities fail to properly regulate amidst a global crew change crisis.

“Quite frankly, the Australian Government allowed things to get this bad on the Unison Jasper. They were clearly unconcerned with the seafarers’ conditions on board when they freely issued a temporary licence to this ship just last month. This is a ship with crew who had worked for 13 months — already beyond the legal limit. This vessel already had complaints lodged to AMSA for serious breaches of seafarers’ rights. Why did they grant it a licence when all the warning signs were there? 

“This route was previously serviced by Australian vessels, crewed by local Australian seafarers, and paid Australian wages and conditions, but the last remaining Australian vessel on this run, the CSL Melbourne, was removed from service in 2016. These Australian ships have been replaced by foreign Flag of Convenience vessels, operating under temporary licenses from the Federal Government, and crewed by exploited foreign workers.”

Mr Crumlin said exploitation and abuse on ships often occurs in supply chains when those who are supposed to be responsible turn a blind eye. 

“The owners of Tomago Aluminium — which include Rio Tinto and CSL — must take action to address this extreme exploitation in their supply chain. We have the largest aluminium smelter in Australia, owned by some of the largest companies operating in the country, allowing abuse and exploitation to occur under their noses,” he said.

“The mistreatment of these Burmese seafarers is not only illegal under Australian law, it is a clear breach of the international Maritime Labour Convention. The companies which are profiting from exploitation in our waters, and indeed anywhere, should be held to account.

“In my view, the continued issuing of licenses to Flag of Convenience vessels such as the Unison Jasper, crewed by exploited seafarers, makes our Federal Government complicit in the inevitable abuse that transpires. It’s built into the system.”

Mr Crumlin said discovery that the crew had been on board for up to 14 months, far in excess of the Maritime Labour Convention maximum of 11 months, was proof that the Federal Government was also asleep at the wheel when it came to regulating Australian shipping and upholding seafarer’s human rights.

“Seven of the crew members on board the Unison Jasper have been on board for 14 months with no way to get home, with the remaining four ratings on board too frightened to re-join the ship,” he said.

“Outrageously, the company was refusing to hand over the seafarers’ passports and was attempting to dictate terms to the Australian authorities. You have to wonder how we got here.

“Australia needs to sharpen its response to the unfolding crew change crisis that is leading to more cases like these. International seafarers need to be able to leave and join ships at Australian ports. We cannot tolerate floating prisons in our waters.”

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THE Financial Services Council (FSC) is using Life Insurance Awareness week as an opportunity to release data which reveals interesting insights into the health of the nation.

FSC has released 2019 data about the most common causes of life insurance claims that reveal some of the biological differences between men and women.

KPMG, on behalf of the FSC, provided in-depth analysis of the causes of life insurance claims, particularly for Australians of working age. This data is regarded as being unsurpassed anywhere else in the world for its granularity and timeliness.

FSC senior policy manager for life insurance, Nick Kirwan said, “New claims statistics tell us a lot about the differences between men and women and across all three product lines the messages are clear.”

• The top cause of death claims is cancer for both men and women.  For men, it accounts for 39 percent of all death claims, but for women it accounts for a huge 61 percent, of which 29 percent are breast cancer and itself the most common cause, followed by colon cancer (15 percent) and lung cancer (14 percent). The second most common cause for men is accidents, accounting for 20 percent, whereas for women it’s the third most common cause at seven per cent of female deaths.

• For total permanent disability (TPD) claims, mental health disorders top the list for both men and women at 24 percent and 27 percent respectively.  Once again, accidents come second for men at 17 percent, but for women it’s a different story, with accidents down in fifth place at just 11 percent.

• Income protection claims reveals further granularity about the differences between men and women. The top cause for both is accidents, but again we see men having relatively many more accidents than women at 38 percent versus 28 percent.  It also tells a different story for mental health, which comes in second for women at 22 percent, whereas for men it’s less than half that proportion at only 10 percent.

“This data confirms that for working age Australians, cancer is by far the biggest killer and it’s even more deadly for women than for men. We see that men have significantly more accidents than women, and women more mental health claims,” Mr Kirwan said.

“During this life insurance awareness week we encourage all Australians to check what life insurance cover they have - be aware of what you have and what you’re paying for. Give your superannuation trustee or life insurance company a call today so you and your family are secure no matter what happens.”

LIFE INSURANCE CLAIMS DATA FOR 2019

Data is sourced from the FSC-KPMG life insurance data project and APRA Life insurance claims and disputes statistics.

About the Financial Services Council

The Financial Services Council (FSC) has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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THE Australasian Investor Relations Association (AIRA) has welcomed the Federal Government’s extension of temporary measures giving businesses and boards legal certainty for a further six months.

AIRA chief executive Ian Matheson said the extension allowing businesses to convene virtual annual general meetings and sign documents electronically was a vital second reprieve to aid businesses through the ongoing health crisis.

“The extension will support nearly 1000 listed companies with their annual general meetings and allow millions of shareholders to participate in company meetings online," he said.

“These companies were in an impossible position to meet their legal obligations in respect of communicating with shareholders and convening meetings.

“With the COVID-19 crisis deepening in Victoria and NSW on high alert, the extension gives these companies certainty and flexibility to navigate a pandemic that is far from over and a recession that is just beginning to take effect,” Mr Matheson said.

AIRA was a leading advocate for the introduction and extension of the temporary measures first introduced in May 2020 and were set to conclude in November 2020.

“The temporary measures introduced in May have been enormously successful,” Mr Matheson said.

“We’ve seen a 36 percent increase in the number of people attending company meetings and observed greater levels of shareholder participation. Businesses have also saved money on printing and venue hire during a period when every dollar is precious.

“The next step is permanent reform. The coronavirus crisis will eventually subside, but Australia’s corporate legislation will remain outdated.

“Digital investor communications and virtual AGMs must become a permanent feature of the Corporations Act.

“This will not only help businesses through the current unprecedented period, but also thrive on the other side, whenever that may be,” Mr Matheson said.

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell is concerned about a growing trend of insurance companies denying small businesses insurance and pricing them out of the market, launching an inquiry into insurance affordability and availability this week.

The inquiry will investigate the practices of the insurance industry that impact small businesses and consider whether small business insurance products are fit for purpose.

“My office has heard a number of complaints from small businesses regarding poor behaviour by insurance companies,” Ms Carnell said.

“Small businesses that have held insurance policies for over a decade without a single claim have been refused renewal. Others have discovered their renewal cost has more than doubled.

“We know of cases where small businesses with current policies have been subjected to major changes that have reduced their coverage without consent, and with no refund of premiums.”

The insurance inquiry will target a range of issues affecting small businesses including:

-       The availability and coverage of insurance policies provided to small business

-       Insurance policy affordability

-       The role of brokers in getting the right coverage

-       Contract changes that have not been agreed to and whether they amount to Unfair Contract Terms

-       Timeliness of insurance payouts and effectiveness of dispute resolution frameworks

-       The effectiveness of relevant codes of conduct and legislation, including if applicable penalties are adequate

“Insurance for small business is a practical and legal necessity,” Ms Carnell said.

“Small businesses can’t operate without public liability insurance but we are seeing entire industries either denied or facing unacceptably high charges. It’s a major issue that is forcing some small businesses to close.

“This creates a serious risk to Australia’s economic recovery at a very precarious time.”

Small and family businesses that have faced difficulties with their insurance companies are encouraged to complete an online survey or email This email address is being protected from spambots. You need JavaScript enabled to view it..

A final report is expected to be released by December.

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