The strata sector is currently undergoing significant reform. One area receiving particular attention is insurance commissions, which will be changing on April 1st 2026.
For many years across the industry, strata managers have received commissions from insurers or brokers when arranging insurance policies for strata schemes. These commissions were typically built into the insurance premium and used to cover the work involved in managing insurance for a strata scheme.
As regulatory expectations evolve, the focus is shifting toward clear disclosure and transparent fee structures.
At Strata Plus, we have taken a proactive approach to these reforms.
On 1 July 2025, Strata Plus began transitioning clients to a no-commission insurance model, well ahead of anticipated legislative changes. This ensures our clients benefit from greater transparency while maintaining a cost-neutral outcome for owners corporations.
Why Insurance Commissions Are Changing
Insurance arrangements within strata schemes involve a significant amount of administrative work.
Historically, commissions embedded within insurance premiums compensated strata managers for tasks such as:
- sourcing and reviewing insurance quotes
- arranging policy placement and renewals
- assisting with insurance claims
- liaising with insurers and brokers
- coordinating documentation and policy updates
Across the industry, these commissions were built into the insurance premium rather than being charged directly as a management service.
However, regulators are increasingly focused on ensuring that all remuneration structures are clearly disclosed and easily understood by owners corporations.
As part of this broader reform agenda, the industry is moving toward more transparent fee structures, where services are clearly itemised rather than embedded within insurance premiums.
How the Strata Plus Model Works
Under the new structure introduced by Strata Plus:
- Insurance commissions previously embedded within insurance premiums have been removed.
- Insurance policies are arranged on a net-premium basis, meaning the premium no longer includes commission payments.
- Insurance administration services are now clearly included within the management fee.
This approach replaces embedded commission structures with transparent and auditable service fees. .
A Cost-Neutral Change for Owners Corporations
Importantly, this transition does not increase the total cost for the owners corporation.
Previously, insurance commissions formed part of the scheme’s insurance premium. Under the new model, the premium reduces because the commission component has been removed. The management fee is then adjusted to reflect the insurance services provided by the strata manager.
Because the reduction in the insurance premium offsets the adjustment to the management fee, the overall financial impact is cost neutral for the scheme.
In other words, the same services are still being provided — the structure has simply been updated to ensure greater transparency in how those services are charged.
Additional Benefits of the New Structure
While the change is cost neutral, it provides several important benefits for owners corporations.
Clearer Financial Transparency
All insurance-related services are now clearly included within the management fee rather than embedded in insurance premiums. This allows committees and owners to clearly understand what services are being provided and how they are charged.
Potential Stamp Duty Savings
Insurance stamp duty is calculated based on the total premium amount. By removing commissions from the premium, the taxable value of the insurance policy may reduce, potentially resulting in annual stamp duty savings for the scheme.
Predictable Fee Structure
The revised management fee is based on the previous year’s commission level rather than projected increases, providing greater predictability for future budgeting.
Alignment with Industry Reform
By implementing this model early, Strata Plus is aligning with the direction of NSW Fair Trading reforms, ensuring our clients are already operating within a framework designed to increase transparency and accountability.
What Services Are Included?
Under the new model, standard insurance administration services are included within the management fee, such as:
- coordinating insurance renewals
- sourcing insurance quotations
- placing insurance policies
- lodging insurance claims
- liaising with brokers and insurers
In situations where a claim becomes particularly complex, for example, involving prolonged negotiations, dispute resolution, or appeals. Additional fees may apply to cover the additional time required.
These will always be clearly itemised and discussed with the owners corporation in advance.
A Commitment to Transparency
Strata Plus has long supported initiatives that strengthen professionalism and transparency across the strata industry.
Moving to a no-commission insurance model reflects our commitment to:
- clear and transparent fee structures
- removing perceived conflicts of interest
- aligning with evolving regulatory standards
- providing straightforward and accountable service to our clients
By implementing this change ahead of legislative requirements, we are ensuring our clients benefit from greater clarity and confidence in how their strata management services are delivered.
Speak With the Strata Plus Team
If you would like to learn more about how the no-commission insurance model works, or how Strata Plus can support your building with transparent and proactive strata management, our team would be happy to assist.
Contact Strata Plus today to speak with an experienced strata professional.
