Australia

Topic: Insurance

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ASIC not content with home and contents insurance

A spate of natural disasters in recent years has revealed a concerning level of underinsurance in the home and contents insurance market, according to reports released by ASIC in late 2014. ASIC has called on insurance providers ‘to implement measures that will meaningfully improve consumers’ understanding of their policy, and help ensure consumers buy a … Continue Reading

FSI Consumer Protection Recommendation 26: Insurance disclosure tools and calculators

The FSI referred to studies undertaken after natural disasters revealing inadvertent underinsurance due to consumers struggling to make an informed decision about the sum insured.  Survey results highlight that even when consumers take the time to read insurance documentation, including the product disclosure statement, many misunderstand it, scan it briefly due to over-reliance on sales … Continue Reading

FSI Consumer Protection Recommendation 25: Raising the competency of advisers

The FSI has recommended that the competency of financial advice providers be raised and an enhanced register of advisers introduced.  The Government is currently considering mechanisms to raise minimum education requirements for financial advisers and the FSI recommends that this be prioritised. The FSI found that the minimum standards are currently too low which affects … Continue Reading

FSI Consumer Protection Recommendation 24 : Aligning with the interests of consumers

The FSI identified the need to better align the interests of financial services providers with those of consumers to ensure better consumer outcomes. The following strategies have been recommended to address some underlying issues: Raising standards of conduct and levels of professionalism: This aims to address concerns regarding organisational cultures that do not focus on … Continue Reading

FSI Consumer Protection Recommendation 22: Product intervention powers

The FSI has recommended that ASIC be granted a product intervention power to enable it to take a more proactive approach to reducing the risk of significant detriment to consumers.  Specifically, this new power would allow the regulator to intervene to require or impose: amendments to marketing and disclosure material; warnings to consumers, and labelling … Continue Reading

FSI Consumer Protection Recommendation 21: A targeted and principles-based product design and distribution obligation

The FSI shares concerns raised by ASIC that consumers are buying products that do not match their needs. The existing regulatory framework relies heavily on disclosure, financial advice and financial literacy. However, disclosure can be ineffective for a number of reasons, such as complexity of documents and misaligned interests. The FSI also considers that current … Continue Reading

Product governance and a proactive, interventionist regulator: the consumer protection recommendations of the Financial Systems Inquiry

The release of the final report of the Financial Systems Inquiry (FSI) brings us a step closer to a significant shift in conduct regulation in Australia.  As we have previously reported, Australia seems set to join a UK and European trend away from regulation driven by disclosure  towards an approach where product providers bear the responsibility … Continue Reading

The Murray Inquiry – Technology and cybersecurity

As with the Murray Inquiry’s Interim Report, the Final Report highlights cyber security and technology related fraud risks as an emerging trend for the financial services industry that presents many challenges. At the forefront of the risks that arise is the rapid pace of technological change that is occurring within the financial system and how … Continue Reading

The Murray Inquiry – Innovation, Technology and Regulators

The Murray Inquiry’s Final Report strongly endorsed facilitating innovation in the financial services industry and technology neutral approach to regulation of financial services providers. The Report recommends the establishment of a permanent public–private sector collaborative committee, the ‘Innovation Collaboration’, to facilitate financial system innovation. This is similar to the ‘Innovation Hub’ initiative by the UK’s … Continue Reading

The Murray Inquiry – Superannuation

The Murray Inquiry’s Final Report was a mixed bag for the super industry, with some recommendations going some way toward addressing the needs of industry and consumers but with many of the hard decisions left for another day and another review. Improving efficiency The Inquiry clearly has reservations about the effectiveness of the Stronger Super … Continue Reading

ASIC works with industry on digital disclosure

After recently releasing a consultation paper aimed at facilitating innovative financial services disclosure (see our previous blog), ASIC has announced a joint industry project to develop such innovative disclosure. As part of the project, ASIC will work with AMP and Vanguard to develop and user-test a short, online ‘key facts’ sheet and a self-assessment tool … Continue Reading

Inadequate professional indemnity insurance endangers AFS licences

Is your professional indemnity insurance adequate? If not, you may be jeopardising your Australian Financial Services Licence (AFSL) and in turn your entire business. ASIC recently cancelled a number of AFSLs due to inadequate professional indemnity arrangements. This is despite changes to the law that have been with us for more than a decade. Since … Continue Reading
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