Banking royal commission: Natural disaster insurance probe delayed

Banking royal commissioner Kenneth Hayne has postponed hearings on natural disaster insurance case studies.

Banking royal commissioner Kenneth Hayne.

Banking royal commissioner Kenneth Hayne has postponed hearings on natural disaster insurance case studies — the first sign that the government’s year-long schedule for the inquiry may not be enough to examine all areas of financial services misconduct in its terms of reference.

The hearings were due to start this week, but Mr Hayne said at the royal commission’s fourth round of hearings in Brisbane that he would be rescheduling case studies involving natural disaster insurance to the sixth round of hearings, set for September.

The postponement of the hearings will add pressure on the government to extend the period for the inquiry. This was a point of contention with the opposition when the royal commission was announced last year.

Natural disaster insurance supplied by Brisbane-based insurer Suncorp and challenger group Youi was to be examined by the royal commission in hearings later this week and into next week, when the commission flies to Darwin to investigate financial gouging of indigenous Australians.

Mr Hayne said the commission had continued to receive information about its case studies for its examination of the farming finance sector “both in the form of supplementary statements and notices to produce” from companies and self-identified victims.

“That’s why as a result some of those studies are going to take longer to produce than first anticipated,” Mr Hayne said. “It’s important that they’re done and that they’re done properly,” he added.

“That will give us enough time for the farm finance case studies to be dealt with properly. As I say it is very important that they are.”

That sixth block of hearings will investigate general insurance, life insurance and now natural disaster insurance.

“We are not putting them off into the never-never,” Mr Hayne said. “It’s my hope that, in reordering our work in that way, we can ensure that neither the farming work that we are now looking at or the natural disaster work needs to be in any way compressed by timetabling difficulties,” he said.

The delay will be welcome news for aggrieved farmers who have been urging further investigation into agribusiness lending.

On Monday, Mr Hayne told self-identified victims of Commonwealth Bank’s wholly owned Bankwest subsidiary to contribute claims relating to issues that had not yet been focused on by the commission, following criticisms that the inquiry had not conducted a thorough investigation into CBA’s conduct after the 2008 takeover of Bankwest.

Aggrieved customers have sent the royal commission submissions calling on Mr Hayne to seek more time from the government to conduct further investigation into Bankwest’s conduct when lending to small businesses

Counsel assisting the royal commission Rowena Orr said her team of counsel and solicitors “appreciate” the additional time devoted to farming finance.

“We feel that both topics, farm finance and natural disaster insurance, are important topics that involve multiple consumer and very detailed stories,” Ms Orr said. “We are concerned to make sure each of those stories is properly explained.”