Last week, the Federal Government announced reforms that will see ASIC receive an extra $127m in funding over 4 years.
The reform measures will equip ASIC with stronger powers and funding to enhance surveillance capabilities to combat misconduct in Australia’s financial services industry and bolster consumer confidence in the sector.
NIBA has examined the announcements by the Federal Government and some of the key aspects that could affect insurance brokers are:
- Industry Funding of ASIC: the Government is proceeding with proposals for the financial services industry to provide ASIC funding directly. NIBA has already lodged strong objections to an earlier funding model, which would have been disproportionately costly to brokers, and will carefully examine any new proposals put forward by the Government.
- New obligations on manufacturers and distributors of financial products: the Government will accelerate Financial System Inquiry recommendations for greater legal obligations on manufacturers (insurers) and distributors (brokers). We expect consultations to occur in coming months.
- New powers for ASIC: the Financial System Inquiry also recommended greater powers for ASIC to intervene in financial markets where there is a risk of serious consumer detriment. The Government is proceeding with legislation to give effect to these recommendations. Again, we expect consultations to occur in coming months.
- Changes to consumer complaints: the Government has proposed a review of the jurisdiction of the Financial Ombudsman Service, with possible mergers with other external dispute resolution bodies. NIBA will watch these developments very carefully.
- Eyes of life insurance: ASIC will be given significant additional funding to enhance its data analysis capability, and to improve its surveillance and enforcement activities in the areas of financial advice, responsible lending, life insurance and breach reporting.
The Government has published a fact sheet which outlines the proposed reforms, which can be viewed here.
NIBA very carefully review the detail of the proposed changes as and when it becomes available through further consultation. In the meantime, brokers with questions, comments and concerns should direct them to NIBA CEO Dallas Booth.