The panel will be chaired by past Insurance Council of Australia President Gary Dransfield and made up of experienced industry leaders from the construction, finance and insurance sectors.
DLI is a special type of insurance taken out by the developer to guarantee against major defects for up to 10 years, which is not available in Australia.
Minister for Better Regulation and Innovation, Kevin Anderson, says the NSW Government has embarked on revolutionary reforms in the building and construction sector aimed at promoting a safer and stronger industry.
“A DLI policy would cover potential serious defects which arise up to 10 years after a project’s completion giving confidence to consumers to buy into multi-unit residential construction in NSW,” he said
The introduction of DLI would also tackle the illegal practice of phoenixing – which is when a company is liquidated, wound up or abandoned to avoid paying its debts, and a new company is then started to continue the same business activities without the debt – as only developers who demonstrate a commitment to a long-term market presence will be able to acquire an insurance policy.
“Insurers will be assessing developers’ ratings score, their corporate governance and balance sheets. While good quality work will be underwritten, poor quality developers will find themselves out of the market,” Mr Anderson said.
“Establishing a market for DLI will mean untrustworthy developers are weeded out, creating a stronger, more competitive market where consumers can purchase with confidence.”
The panel will report back to Government with options stemming from its investigations next year.
