The National Insurance Brokers Association (NIBA) has responded to a consultation paper issued by ASIC in relation to the Design and Distribution Obligations (DDO) legislation.
NIBA CEO, Dallas Booth explained that ASIC had issued draft guidance as to how it will interpret and apply the legislation from a regulatory perspective, “NIBA has indicated concerns in relation to a number of the draft proposals put forward in the consultation paper. The NIBA submission indicates where the draft proposals do not reflect the terms of the DDO legislation, and in some cases introduce concepts and obligations that are not consistent with provisions of the DDO Act.”
The Association has strongly urged ASIC to meet and discuss the process for taking out domestic home and motor insurance policies, in order to workshop how the DDO obligations are likely to apply, and to understand the likely impact the legislation will have on procedures for taking out these policies.
The main issue is that the insurance policy is not finally determined until the end of the application process, when the consumer has made all the necessary decisions regarding the cover and related services they wish to purchase.
Booth revealed that the NIBA Board of Directors has discussed this matter with ASIC Deputy Chair Karen Chester and with senior ASIC Executives. NIBA will continue these discussions in order to get the best possible outcomes for insurance brokers and their clients.