Australia

Topic: Insurance

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German regulator updates its guidance on the EU-US Covered Agreement

The German regulator BaFin has updated its guidance on the conduct of reinsurance business by US insurers in Germany under the provisions of the 2017 EU-US Covered Agreement (“Bilateral Agreement between the European Union and the United States of America on prudential measures regarding insurance and reinsurance”). An English language version has also been published, … Continue Reading

Possibility of extending the claws of BEAR

As the financial sector waits for the Australian Prudential Regulation Authority (APRA) to fully awaken the Banking Executive Accountability Regime (BEAR) through the provision of further guidelines, there is already a lot of chatter as to whether BEAR should be extended beyond its initial coverage of APRA-regulated Authorised Deposit-taking Institutions (ADIs). The Parliamentary Joint Committee … Continue Reading

Encouraging results on consumers’ perception of banks

In April 2016, the Australian Bankers’ Association (ABA) initiated the Banking Reform Program – Better Banking (Program).[1]   The Program was developed to protect consumer interests, increase transparency and accountability, and to build consumer trust and confidence in banks through a range of initiatives. Edelman Intelligence has conducted two rounds of consumer research studies to track … Continue Reading

Royal Commission into Misconduct in Financial Services

The much anticipated Royal Commission was no surprise to the Australian banking industry.  What was surprising was the extension of its terms of reference to local and foreign deposit-taking institutions, life and general insurers, superannuation funds, as well as asset managers, financial planning businesses and all other holders of Australian financial services licences.  Let there … Continue Reading

Did you implement ASIC’s recommendations on CCI?

Consumer credit insurance (CCI) is a type of add-on insurance sold with credit cards, personal loans and car loans. It is promoted to borrowers to help them meet their repayments if they lose their job, become sick or injured, or die. However, CCI has long been associated with poor consumer outcomes in Australia and overseas, … Continue Reading

Annual Financial Institution Symposium

Norton Rose Fulbright is pleased to offer you a rare opportunity to hear from some of the leading voices in risk and disruption. We will be hosting our annual Financial Institutions Symposium in our Sydney office on Thursday 27 October 2016. Discussion will focus on current ‘Risks & Disruptors’ in the global technology and regulatory … Continue Reading

Product suitability obligation and intervention powers to be fast-tracked: Government responds to calls for Royal Commission into the banks

In response to Opposition calls for a Royal Commission into the banking sector, the Australian Government has announced a $127 million reform package aimed at increasing the powers of Australia’s corporate watchdog, ASIC. A key component of that package will be the accelerated implementation of two key recommendations of the Financial System Inquiry: an obligation on … Continue Reading

ASIC sounds warning on add-on insurance products: time to get your houses (and car yards) in order

In his recent speech at the Insurance Council of Australia Annual Forum ASIC’s Peter Kell delivered a scathing commentary on the state of the add-on insurance market, saying that the industry had made insufficient progress towards delivering better consumer outcomes in the area and sounded a warning: if ASIC is still raising similar concerns in … Continue Reading

ASIC consults on online calculators – an opportunity for regulatory innovation

The drive towards automated financial services will gather pace in 2016 and here’s the next opportunity to influence the debate. After updating its relief to better facilitate electronic delivery of mandated disclosure and the use of innovative product disclosure statements (see RG 221), ASIC has released Consultation Paper CP 249 Remaking ASIC class order on generic … Continue Reading

Insurance in Australia: 2015 in review

Continued market consolidation, technology driven disruption and a shift towards behavioural based conduct regulation were the standout themes in the Australian insurance sector over the last 12 months. We take a brief look at the year that was and share our thoughts on what 2016 looks like. Keep ahead or be left behind: rise of … Continue Reading

Australian health and life insurers race into wearable technology

Just as telematics has been supplementing motor vehicle insurance underwriting, Australia’s health and life insurance markets are embracing innovative technologies in the form of “wearables”. Underwriters traditionally rely on pre-policy questionnaires and proposal forms to assess risk and set the terms of cover they will accept; however, the information that can be obtained provides only … Continue Reading

Financial System Inquiry (FSI) – Government Response: hidden pitfalls for insurance brokers and underwriting agencies?

The Government’s response to the FSI contains both good and bad news for insurers and brokers One issue of concern is the proposal that ASIC must approve all changes in control of AFS Licensees.  This will significantly expand such regulatory oversight beyond authorised insurers to a multitude of insurance brokers and underwriting agencies. The good … Continue Reading

Government response to the Financial System Inquiry

Government releases its Response to FSI Final Report. The Australian Government has released its Response to last December’s Final Report of the Financial System Inquiry or ‘Murray Inquiry’. The Government appears to have accepted almost all of the Inquiry’s recommendations and has also proposed additional measures that are consistent with the Murray Inquiry’s underlying philosophy. … Continue Reading

ASIC “on the cusp of change” as organisational culture becomes a key focus of the regulator

The release of ASIC’s corporate plan for the coming three years marks the beginning of a new era of conduct regulation in Australia; one in which organisations may face enforcement action for having a culture that is not adequately consumer-centric or for taking advantage of consumer biases which lead to poor consumer decision making. We … Continue Reading

“User pays” funding model for ASIC: the first step towards a bigger, bolder regulator gets Government backing

The Government has given its support to a “user pays” industry funding model for ASIC in line with the recommendations of the Financial System Inquiry (FSI). A consultation paper has been issued today by Assistant Treasurer, Josh Frydenberg, detailing how the funding model will work. The new funding model will require the biggest users of … Continue Reading

Insurers “strongly encouraged” to improve disclosure of prudential matters

On 22 June 2015, the Australian Prudential Regulation Authority (APRA) released a letter to all Chief Executive Officers (CEOs) of general insurers, Level 2 insurance groups and life companies (collectively, the insurers) encouraging them to adopt better public disclosure practices for prudential matters. The current capital adequacy framework for insurers is based on a three … Continue Reading

Credit cards to improve travel insurance disclosure

Credit card providers have agreed to provide customers with clearer information regarding when ‘complimentary’ travel insurance is activated and to what extent cover is provided. Many credit card holders have access to ‘complimentary’ travel insurance. However, many of these do not know that they have the benefit of cover, how to activate it, how it … Continue Reading

Reinsurance in a world of natural disasters

With the flood of recent natural disasters, APRA has clarified the type of aggregate reinsurance arrangements that require its approval.  Accordingly, it is timely for insurers to review their reinsurance arrangements to determine whether such approval is required. In recent years, Australia and New Zealand have amply demonstrated their propensity for catastrophic losses flowing from … Continue Reading

Financial Services Tomorrow…

We are on the cusp of a new era in the evolution of the financial services industry. New technology, data analytics and behavioural economics are promising to revolutionise the customer experience. If the regulators remove the regulatory barriers, then using multi-media to deliver mandated and voluntary disclosure in different formats and through different devices will … Continue Reading

Regulatory disruption

Technology led innovation can cause much indigestion for conduct and prudential regulators as they try to find the right regulatory pigeion hole for innovators in their regimes that were not built to handle such innovation.  It is this disruptive impact of innovation that is shaping the regulation of tomorrow. Numerous conduct regulators around the world have acknowledged that a mandatory … Continue Reading

ASIC-run home insurance comparison website opens for business

The Federal Government’s novel approach to tackling housing insurance affordability issues in North Queensland continued this week with the unveiling of ASIC’s home insurance comparison website. Replete with disclaimers and emphasising product features over policy price, the website is intended to aid consumer understanding and decrease underinsurance in a market struggling under flood and wind … Continue Reading

ASIC runs over No Claims Discount schemes

The Australian Securities & Investments Commission (ASIC) has continued its campaign for improved disclosure by insurers and their agents – this time in the motor vehicle insurance sphere. On 26 February 2015, ASIC published a report that examines the operation of no-claims discount (NCD) schemes for motor vehicle insurance and concluded that the schemes do not … Continue Reading

ASIC enforcement actions Q4 2014: is an increase in penalties on the cards?

ASIC has recently released its quarterly enforcement report detailing enforcement outcomes between 1 July 2014 and 31 December 2014.  The report addresses the range of criminal and civil action taken by the regulator, and highlights action taken against companies and directors resulting in criminal charges which were most significant during the period. In addition, significant … Continue Reading
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