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Canberra insurance move gains ALRTA backing

Exemption removes potential impediment to short-notice cover

 

The Australian Livestock and Rural Transporters’ Association (ALRTA) has praised an announcement by federal treasurer Josh Frydenberg exempting wholesale-style insurance products from new regulation applying to add-on insurance products. 
 
The decision means ALRTA members will continue to have access to insurance covering land transport of livestock and other high value items, the association notes.
 
Arising from a recommendation of the Financial Services Royal Commission, from October 5, 2021, the federal government will introduce a new deferred sales model prohibiting the sale of add-on insurance for at least four clear days after a consumer has committed to acquire a principal product or service. 
 
ALRTA national president Scott McDonald said the proposed prohibition would have had negative consequences for livestock and other carriers.

“Our member carriers are often called upon to move livestock or high-value items at short notice,” McDonald continued.
 
“In these circumstances, carriers may require additional insurance cover which must be arranged at the same time as accepting the load.

“Livestock sold under auction conditions is particularly problematic because neither the owner, value or destination are known prior to sale.

“We simply cannot wait four days to acquire an appropriate add on insurance product.”


How ALRTA supported Mt Gambier saleyard upgrades, here


McDonald noted that, while ALRTA appreciates the need for consumer protection, it must be achieved in a manner that optimises choice, minimises red tape, and does not impede efficient freight flow or induce carriers to take unnecessary risks.
 
“Without this exemption, customers or carriers who are unable to obtain add-on insurance quicky and easily may choose not to cover additional risks,” he said.

“In some cases, freight movement may need to be delayed.
 
“Although it would be possible to obtain add-on insurance from an alternative provider, in our view this would not in of itself provide enhanced consumer protection.

“In fact, it would reduce choice and increase red tape associated with urgent freight movements.
 
“I thank Treasurer Frydenberg for listening to our concerns on this important matter and agreeing to establish an appropriate exemption.”

 

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