Australia

Topic: Insurance

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A tale of two claims: Federal Court hands down two judgments on non-disclosure

In what has proven to be the best and worst of times for insurers, two recent Federal Court of Australia decisions shed further light on when an insurer may be able (or in the case of the second case, unable) to exercise its statutory rights in the event of non-disclosure. In All Class Insurance Brokers … Continue Reading

Not FAR to go until accountability regimes come to insurance

The Treasury has released for consultation the draft bill for the Financial Accountability Regime (FAR or the Regime). The Regime will apply to the banking, superannuation and insurance sectors. Importantly, the Regime strengthens the Banking Executive Accountability Regime (BEAR), and extends the regime, in line with the recommendations from the Financial Services Royal Commission, to … Continue Reading

Are insurers still allowed to talk to customers? ASIC proposes changes to Hawking Prohibitions regulatory guidance

On 21 July 2021, ASIC released Consultation Paper 346 and a draft updated Regulatory Guide 38 (RG 38) to reflect new legislative changes that strengthen the current hawking prohibitions. As many in the industry will know, new hawking prohibitions come into effect on 5 October 2021. The new hawking prohibitions will not only affect insurers, … Continue Reading

Treasury drops-off products from add-on insurance reforms

We previously wrote on the upcoming implementation of the 2021 insurance regulatory reforms, including the deferred sales model for add-on insurance products. On 8 July 2021, the Treasurer announced which insurance products will be exempt from the deferred sales model. What is the Deferred Sales Model? The Government passed the Financial Sector Reform (Hayne Royal … Continue Reading

Financial services monthly wrap-up – April 2021

During April 2021, ASIC has used its product intervention powers to ban the sale of binary options to retail clients, as well as to extend temporary relief instruments amidst COVID-19. ASIC has also urged claims handling firms to lodge licences by next month. The superannuation sector has seen the release of exposure draft regulations to … Continue Reading

EIOPA launches IDD single rulebook online

On 8 April 2021, the European Insurance and Occupational Pension Authority (EIOPA) published a single  rulebook online containing requirements under the Insurance Distribution Directive ((EU) 2016/97). The single rulebook covers the Insurance Distribution Directive, the Delegated Regulation (EU) 2017/2358) (on product governance and oversight), Delegated Regulation (EU) 2019/1935 (requirements relating to insurance-based investment products) and … Continue Reading

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
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