ASIC corporate plan – what’s on the horizon for insurance

ASIC has published its Corporate Plan for 2018-2022. The plan articulates the regulatory actions ASIC proposes to take over 2018-2019.

ASIC’s plan includes the following regulatory actions relevant to the insurance industry:

  • Publishing the findings from ASIC’s review of life insurance direct sales and distribution to promote better practices. This has already occurred (read more about this here).
  • Consulting on a deferred sales model for add-on insurance and other financial products sold through car dealerships and extending improvements to the design, value and sales practices of add-on insurance to warranties sold in car dealerships.
  • Establishing a reporting regime with APRA for the regular publication of life insurance claims and claims-related disputes data (at industry and insurer-specific levels) to improve transparency and accountability across the sector.
  • Investigating insurance in superannuation, namely claims and complaints handling, member engagement and disclosure practices relating to group cover, including monitoring the adoption of the Insurance in Superannuation Voluntary Code of Practice, in conjunction with APRA.
  • Taking action for unconscionable or unfair sales of products to vulnerable customers, such as the sale of funeral and life insurance products to Indigenous communities.
  • Continuing to review the quality of life insurance advice, including identifying and banning advisers who have provided poor advice.
  • Reviewing banks’ compliance with the recommendations in Report 266 (‘Consumer credit insurance: A review of sales practices by authorised deposit-taking institutions’). ASIC will publish its findings and recommendations by March 2019. ASIC will then undertake follow-up work, including targeted surveillance of banks’ sales, distribution, compliance monitoring and complaints handing practices and monitoring of data trends.
  • Examining TPD claims practices (e.g. timeframes and evidence). This is a follow up to Report 498, which found TPD insurance had higher rates of declined and withdrawn claims, disputes and issues with restrictive definitions.
  • Analysing data on the extent and aspects of allowable conflicted remuneration (e.g. grandfathered commissions and conflicted remuneration allowed by FOFA).
  • Developing an approved products list reporting regime for firms that issue products and provide advice, after considering which entities is should apply to, how they will report their data and how ASIC can ensure data is reliable and consistent.

A full copy of the Corporate Plan is available here.