Vic: High rise developers no longer need warranty insurance

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Vic: High rise developers no longer need warranty insurance

Eds: Rpting, omitting 8th par of original story sent 0230 AEST this morning, whichreferred to the "collapse" of the insurer Dexta

MELBOURNE, April 11 AAP - The Victorian government last night released builders ofhigh-rise developments from the requirement to hold warranty insurance.

Victorian Finance Minister John Lenders said the change in regulation was to protectthe state's $1.4 billion residential high-rise construction industry.

He said the new regulation came into force yesterday and would allow building permitsto be approved without insurance in place.

"Builders of high-rise residential developments were in an impossible situation (as)they could not have their building permit approved unless they had warranty insurance,"

he said.

"The exemption has been made because the bulk of the insurance industry has indicatedit will no longer provide warranty insurance for residential buildings of more than threestoreys.

"The government has acted quickly to ensure that Victoria's building and constructionindustry was not adversely affected by the insurers' decision."

Mr Lenders said the changes were agreed to by Victoria and NSW under a 10 point planreleased last month.

Dexta, one of two companies offering warranty insurance, said it had stopped issuingnew policies after experiencing problems getting sufficient reinsurance.

Mr Lenders said that unlike the HIH collapse, Dexta was still operating, just not issuingnew policies.

"Unlike in the HIH days, all existing programs are continuing," he said.

"This is a matter of new permits being issued and new policies being issued."

AAP db/ldj

KEYWORD: DEXTA DAYLEAD (RPTING)