No Insurance Commission. So What Are You Paying For?

There is more than one job involved

The insurer underwrites the risk and issues the policy. A broker may approach insurers, explain cover and exclusions, and help with claims within the scope of their engagement.

The strata managing agent may coordinate building information, renewal dates, approvals, payments, records and claims administration, depending on the agreement and delegations. The Owners Corporation makes decisions reserved to it.

Three ways costs can appear

1. Insurance commission. An insurer or broker may pay commission to an intermediary. A strata managing agent may receive a disclosed share where the law permits and the required authority is in place. Ask how it is calculated and who receives it.
2. Agreed fee for service. The management agreement may include renewal or claims work in the annual fee or provide separate agreed charges. Ask which tasks the fee covers and what triggers an extra charge.
3. Broker fees and policy cost. Check the broker’s fee, base premium, GST, other taxes, duties and levies against the quoted total. Ask which amounts are already included before comparing costs.

What NSW law requires

Under section 166, the agent must provide at least three quotations from different providers for each type of insurance proposed, or give the Owners Corporation written reasons if fewer are provided. Quotes must itemise applicable charges, including the base premium, commissions, broker fees, GST, stamp duty, levies and underwriting agency fees. They must show who ultimately receives any commission or broker fee and whether the provider is connected with the agent. Commissions and broker fees must be shown in dollars and as a percentage of the base premium.

Section 57 prohibits the agent from taking an insurance commission where the Owners Corporation obtained the quotation and arranged payment without the agent’s assistance. Sections 60 and 71 set out disclosure obligations during an appointment and before appointment. The October 2026 changes to section 60 clarified the details to report at the AGM about commissions and training services, including who provided or will provide them.

From 1 January 2026, SCA NSW began replacing insurance commissions in new contracts for its member agencies under its industry policy. Existing agreements may continue under that policy until they expire. NSW law still permits some commissions subject to its requirements. The NSW Productivity and Equality Commission’s review considered further options for reform.

What owners should ask

Use the agency agreement and the actual quotations. This is general education and does not provide personal insurance or legal advice.

• What is the total policy cost, and what cover does it buy?
• Who receives a commission, broker fee or service charge, and how much?
• Which tasks are included in the annual management fee, and which cost extra?
• What does an actual no-commission quotation show for the premium and service charges?
• How will claims, mid-term changes, certificates and insurer liaison be charged?