icare announces new HBCF distributor panel

A Request For Tender (RFT) in 2017 reduced the previous panel of distributors from over 100 to the current panel of 23 qualified providers of distribution services.

In October 2020, a competitive procurement commenced, which sought distributors with the expertise to manage the end-to-end process of builders' warranty insurance.

The successful distributors on the new panel are (in alphabetical order):

• Coverforce Insurance Brokers
• Don Hutton – The Builders Insurance Broker
• FINSURA Insurance Broking
• HIA Insurance Services
• Insurance House Group
• Master Builders Insurance Brokers
• MBA Qld
• Savill Hicks
• Willis Tower Watson.

This new panel is intended to provide a better balance of portfolio opportunities for distributors and improved service for builders and homeowners. Distributors on the panel will also need to be more transparent on fees and charges, enhancing competition for the benefit of builders and homeowners. More information on fee disclosures will be available in the coming months.

Transition arrangements for the new panel

Contracts for new distributors will commence on 30 April 2021 and details will be disclosed on the NSW eTendering website within 45 days from that date as per NSW Government guidelines. Builders engaged with unsuccessful distributors will be contacted and can then access any of the distributors on the new panel.

If I am an unsuccessful distributor, what transition arrangements should I be making?

During the 2020 distributor RFP process, existing distributors were requested not to wait until the RFP outcomes were known to begin making contingent arrangements in the event they were unsuccessful at tender. Unsuccessful distributors have eight weeks to engage with their customers about transition of their HBC insurance business, in line with their termination obligations under the expiring deed.

As with previous HBC distributor tenders, some unsuccessful distributors may wish to enter partnership or referral agreements with successful brokers. These can smooth the transition process, as long as the receiving distributor is compliant with all their obligations under the new deed.

If no new distributor arrangements are advised to HBCF by 31 March 2021, icare will work with builders to ensure they are assigned to a new distributor and make the changes on the systems.

Selection process

These providers were selected through an open and transparent procurement process. A Request for Proposal (RFP) was released on the NSW Government eTendering website on 29 September 2020 and was open for two months.

As the Home Building Compensation Fund (HBCF) does not remunerate distributors, the RFP was a zero-dollar tender with procurement process overseen by external procurement consultants and probity advisers O'Connor Marsden & Associates.