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Insurance a priority in ASIC’s new corporate plan

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“Addressing harms in insurance” is one of seven top strategic priorities listed in the Australian Securities and Investments Commission’s (ASIC’s) new Corporate Plan, to be published at the end of the month.

ASIC supports insurance law reform, Commissioner John Price told delegates at the Risk Australia Conference on Thursday, particularly surrounding unfair contract terms and issues in claims handling.

The regulator gave a damning review last month of consumer credit insurance (CCI) in which consumers were found to be paid out only 19 cents in claims for every dollar paid in premiums. Allianz has since dropped the product line and National Australia Bank is the subject of a CCI class action.

ASIC will continue reviewing specific insurance areas, including CCI, total and permanent disability insurance, travel insurance and fraud investigation practices, and is “prepared to take enforcement and other regulatory action against insurance mis-selling,” Mr Price said.

“Embedding appropriate norms of conduct at all levels of your organisation is your best defence against misconduct that can cause harm to your clients, the wider market and ultimately, your own firm,” Mr Price said in a speech delivered in Sydney.

“Poor culture, a lack of accountability and insufficient concern for consumer and investor outcomes often drive harms in the sectors we regulate.”

ASIC’s seven strategic priorities:

  1. Effective and efficient enforcement action
  2. Addressing the royal commission’s recommendations and referrals
  3. Establishing ASIC as conduct regulator for superannuation
  4. Addressing harms in insurance
  5. Improving governance and accountability
  6. Protecting vulnerable consumers
  7. Addressing poor financial advice outcomes.