Withheld insurance is blood money: Talbot

A former director of NRMA is calling on the insurer to disclose how many Queensland flood claims it has refused to pay.

Richard Talbot, who still holds NRMA shares, has made a submission to the Queensland Floods Commission of Inquiry explaining why he believes Australia needs a statutory body that insures people against natural disasters.

The commission, which is examining the flooding of more than 70 per cent of the state last summer, will resume hearings on Monday to investigate insurance and planning.

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"History shows you simply can't rely on these privately-run for-profit insurance companies to be there in the long term or to pay out if they think it's going to harm their profits," Mr Talbot told AAP.

He said taxpayers should make financial contributions to a statutory body that would pay claims in times of natural disaster, operating in much the same way as compulsory third party motor vehicle insurance.

"At the end of the day these private insurance companies are using your insurance premiums to pay their big legal teams to fight you off in court," Mr Talbot said.

"Some insurers wanted to protect their brand name and so they just paid out.

"But NRMA has tried to rely on a small clause to say they won't pay for floods.

"They try to differentiate between flood and storm by asking whether the water came up or down the wall; did a river burst its banks?

"They have various technical fine-print ways that they enforce to get out of paying claims."

His submission details an undertaking NRMA Insurance made to its members before it was owned by Insurance Australia Group (IAG).

Mr Talbot said the company, when its insurance operations were demutualised in October 2000, sent a 157-page statement to its two million members promising it would continue to pay claims.

Members still own NRMA's roadside assistance service.

Having taken legal action in 1994 to prevent the NRMA from being demutualised, Mr Talbot was forced out of the company when it was listed on the stock exchange.

"I have a duty to make sure those written undertakings are upheld," Mr Talbot said.

"I don't see how it is in the company's best interests to turn their back on policy holders in their hour of need."

On Wednesday Mr Talbot called for all insurance companies owned by IAG to disclose the number and value of insurance claims that had either not been paid, or only partially been paid.

He said his fellow IAG shareholders nominated him to stand for a position on the board at the next election in October.

"I am hoping to prick the corporate conscience of those shareholders, because if money is being withheld to bolster profits, that's blood money," he said.

"It's making money out of the grief and misfortune of policy holders and that's money that the mum and dad shareholders would not want to receive by way of dividends."