The life industry is under pressure after an Australian Securities and Investments Commission review found “notable deficiencies” in the way products are sold direct to consumers.

One weakness relates to remuneration: the regulator found some insurers still compare an agent’s sales volumes against expected sales metrics, and many still grade pay adjustments according to successful sales calls.

The review also found the number of claim disputes concerning directly sold policies has increased across all channels, more than doubling since 2018.

“The steps you take in responding to the matters identified … will inform ASIC’s response if we identify conduct of concern, commence investigations or take enforcement action,” ASIC commissioner Alan Kirkland said in a letter to industry CEOs.

The regulator held the review to determine if consumer outcomes have improved since its last assessment in 2018 and the introduction of Hayne royal commission recommendations a few years ago.

“While we acknowledge the improvements made by some life companies in recent years, there remain notable deficiencies in industry practices in relation to direct sales,” Mr Kirkland said.

“The key observations from our review should be shared with your board and actions implemented where relevant to your company’s operations.”