The broad financial services sector and the insurance industry along with broking continues to experience a very high degree of media, regulator and public attention.
Peter Kell, Deputy Chair, Australian Securities and Investments Commission ASIC addressing the industry at the Insurance Council of Australia (ICA) General Forum last week said, “The current climate serves to emphasise that it has never been more important to put the consumer at the heart of everything that you do as a business. Further, the days of narrowly focusing on the minimal requirements needed to meet the ‘black letter of the law’ are over.”
He warned that the pace of regulatory change is unlikely to abate over the short to medium term, “While the Royal Commission is a major focus, the Government has committed to progressing previously foreshadowed reforms. ASIC welcomes this commitment, and we anticipate that the regulatory framework will have been strengthened by the end of this year.”
The Government has also signalled to ASIC that it wishes to consider reforms to the exemption of insurance claims handling from the financial services conduct provisions of the Corporations Act, but Kell said that final steps on the issue will wait until the Royal Commission is concluded.
Kell said that the regulator welcomes the review of the General Insurance Code of Practice launched by the council and the opportunity to contribute.“The Code review presents the industry with an opportunity to demonstrate to the community that you have heard their concerns and are committed to addressing them, and will do so in a timely way.
“For this to occur there must be a recognition and willingness among Code subscribers that the bar needs to be raised. I encourage the industry to fully embrace this opportunity to drive change and instil a positive corporate culture that places the consumer at the centre.”
Kell acknowledged the proactivity of the industry for its decision to initiate the code review and highlighted work around vulnerable customers, investigation and surveillance practices, third-party product distributors and easier pricing comparisons as key areas of focus.
“Whether or not you seek approval of your updated code is a matter for the industry,” Kell continued. “But having said this, the message I have for you today is that the insurance code is a good code, an important code, and we think it is capable of meeting ASIC’s approval requirements.”