SMALL and medium-sized builders will have to wait to join the Master Builder’s Association’s home indemnity scheme (HIS WA) mutual fund after it failed to secure financial backing from the State Government.
The MBA, Housing Industry Action Group, Jardine Lloyd Thompson, and Western QBE HIS WA fund will be seeking a private reinsurer. The scheme was scheduled for a February launch but April is seen as a more likely date.
Consumer and Employment Protection Minister John Kobelke said the mutual funds were aware the Government was only providing liability to single builders or building companies with a liability over $10 million.
“Some time ago a major insurer made it very clear to New South Wales and Victoria that it would exit the market if it was not covered for claims by individual builders or individual building groups of over $10 million. We were forced to go along with that,” Mr Kobelke said.
“We changed the law last year to allow mutuals to set up so we could make it a more competitive marketplace.
“The mutual fund could insure 500 small builders, and the total amount could add up to more than $10 million. It has been made very clear that that sort of cover of reinsurance is not available to private insurance companies or mutuals.”
MBA housing director Gavan Forster said HIS WA was confident the group would find a private reinsurer.