This media release from 2 September, 2025 is about the phase out of insurance commissions by SCA (NSW).
With reforms sweeping in across NSW, the Strata Community Association (NSW) has announced the removal of insurance commissions for strata managing agents, a critical leap toward trust and integrity in the industry.
The Reform: Commission-Free Contracts from 2026
From 1 January 2026, SCA (NSW) will phase out the acceptance of insurance commissions by strata managing agents. Specifically, new SCA (NSW) standard management contracts issued by SCA (NSW) members will not include an option to accept commissions on insurance products and SCA (NSW) members using their own management contracts will also not offer the option. Compensation will instead shift to transparent fee for service for insurance and an increase in agreed services, in consultation with clients.
Leadership Speaks: Reform, Trust, Transparency
SCA (NSW) President Robert Anderson emphasised the importance of this change by stating that “this is a milestone moment for strata. The decision to replace insurance commissions over this phased transition has not been made lightly, or quickly.”
He further highlighted the benefits to different stakeholders, saying, “for owners and committees, this reform will deliver transparency, accountability and pricing simplicity. For managers and their businesses, it will deliver certainty, business sustainability and improve trust and credibility with clients.”
“Strata managing agents should be proud to talk about the value they bring to consumers and why they should be paid to carry out these critical tasks in relation to strata insurance, and this reform will deliver on that,” Mr Anderson said about the reform.
Context: Why This Matters Now
NSW is undergoing dramatic policy shifts in response to widespread concern over strata insurance commissions. A recent inquiry by the NSW Productivity and Equality Commission, requested by the NSW Government, is reviewing the impacts of banning commissions and other conflicted payments. This review comes amid fears these arrangements lead to inflated costs, reduced competition, erosion of trust, and discourage well-informed financial decision-making by owners.
The reform builds on momentum from previous legislative changes, including stricter disclosure requirements and increasing penalties for non-compliance. For example, since February 2025, new rules have required strata managers to disclose supplier connections, broker fees, and commissions—failing which they risk penalties up to $110,000.
These changes partially stem from investigative media reports. Notably, the ABC revealed commissions as high as 110% without full disclosure, exposing a culture of kickbacks and hidden markups.
National Significance
NSW reforms are closely watched nationally. With nearly half of Australians expected to live in strata schemes by 2050, and high-density housing key to tackling housing affordability, ensuring a transparent, trustworthy strata insurance market is critical.
Calls have grown for other states and territories to follow NSW’s lead, aiming to eliminate conflicted remuneration and rebuild trust across the strata sector.
Looking Ahead
The Productivity and Equality Commission will complete its review and report by 27 February 2026, after soliciting stakeholder input and publishing an issues paper.
SCA (NSW) has pledged to support its members through this transition by investing in training, resources, and education, emphasising that while change may be challenging, it will set a new benchmark for transparency and professionalism.
The LookUpStrata Team
This post appears in a special NSW Alert and StrataNews #760 on 3 September 2025.
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Read next:
- NAT: Who’s Paying What? Unraveling Strata Insurance Commissions with John Trowbridge
- NAT: Strata Insurance Commissions. Where do you stand?
- Nat: Strata commission during the insurance renewal process
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And will the insurance brokers rebate the commissions previously paid to the Strata Managers back to the Owners Corporation? Or better yet reduce their commissions?