Industry

ASIC initiates public consultation on IDR standards

ASIC has initiated public consultation on new standards in relation to the handling of consumer and small business complaints. The consultation covers the proposed updates to ASIC’s IDR standards (currently set out in Regulatory Guide 165 Licensing: Internal and external dispute resolution) and a proposed framework for mandatory IDR data reporting by financial firms to …

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Plans unveiled for claims handling reform

The Government has released a consultation paper in response to the recommendation from the Financial Services Royal Commission that claims handling should no longer be excluded from the definition of ‘financial service’. A two-pronged approach has been proposed in response to this recommendation: Remove regulation 7.1.33 which currently excludes claims handling and claims settlement from …

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Stronger penalties for corporate misconduct to be introduced

The Treasury Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 (Bill), which introduces stronger penalties for corporate and financial sector misconduct, has been passed by the Senate. The Bill implements recommendations of the ASIC Enforcement Review Taskforce and will amend the Corporations Act, ASIC Act, National Consumer Credit Protection Act (and Credit Code) and the …

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ASIC focuses in on IDR processes

ASIC has released research exploring the customer experience of internal dispute resolution (IDR) procedures in the financial services sector. Financial services licensees have specific obligations around maintaining an IDR procedure. As well as reporting on statistics around complaints, the research identified that the following are common obstacles encountered by customers during the complaints processes: Structural …

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ASIC proposes updates to organisational competence requirements for advice licensees

ASIC has proposed updates to Regulatory Guide 105 Licensing: Organisational competence (RG 105) that would see advice licensees required to have a responsible manager (RM) that meets a new Option 6 knowledge and skills requirement. Consultation Paper 305, released yesterday by ASIC, includes updates designed to support the professional standards reforms, which aim to lift …

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New mandatory reporting requirements on life insurance claims

The Australian Prudential Regulation Authority (APRA) has released the Life Insurance Reporting Standard LRS 750 Claims and Disputes with the aim of enhancing the consistency and quality of life insurance data. The data will be published through a program established jointly last year by APRA and the Australian Securities and Investments Commission (ASIC). With the …

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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 …

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ASIC reviews insurance cover through superannuation

Following the release of its report into direct life insurance (see our blog entry on that here), ASIC has also released a report on the provision of insurance cover through superannuation (Report 591). Generally, superannuation funds offer their members one or more types of life insurance (such as life cover, TPD cover and income protection …

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ASIC’s review of direct life insurance – the results are in

Late last week, ASIC released Report 587 on the sale of direct life insurance, revealing that its has found that sales practices and product design are leading to poor consumer outcomes. Direct life insurance products are sold within a general advice or no advice model. Throughout 2017-18 ASIC has conducted a multi-stage review of the …

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New EDR scheme established for financial services complaints

The Government has passed legislation which introduces a new external dispute resolution (EDR) scheme, known as the Australian Financial Complaints Authority (AFCA), to resolve disputes relating to financial services complaints. The establishment of AFCA means there will be a single scheme for all financial services and superannuation complaints. Currently there are three separate schemes: the …

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Draft legislation proposes design and distribution obligations for financial products

Late last year, the Government released an exposure draft of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2017 (Bill). The Bill seeks to introduce: design and distribution obligations for financial products to ensure such products are targeted at the right people; and a temporary product intervention power for ASIC …

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ASIC review into direct life insurance results in customer refunds

ASIC has announced that ClearView Life Assurance Limited (Clearview) will refund 16,000 customers a total of approximately $1.5 million. This follows an ASIC review of Clearview’s life insurance sales practices. The review focused on sales to consumers residing in high Indigenous populated areas who were unlikely to have English as their first language. The sales …

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ASIC seeks further powers to provide directions to licensees

The ASIC Enforcement Review Taskforce (Taskforce) is seeking to expand ASIC’s powers to give directions to financial services and credit licensees (licensees). This follows on from the Taskforce’s earlier recommendation that ASIC’s banning powers be enhanced (see our previous update for more information – available here). The key recommendations from the Taskforce are as follows: …

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