With government inquiries and reforms proposed for the financial and insurance sector, what will brokers have to be aware of for 2017?
Radford Lawyers principal Mark Radford says it will likely be a regulator intensive year in 2017.
“It is expected ASIC will focus on general insurance markets beyond add-on motor insurance,” he says.
For example, ASIC’s Corporate Plan identifies key risk areas that impact on brokers, such as gatekeeper culture and conduct, misalignment of retail product design and distribution with consumer understanding, digital disruption and cyber threats, to name but a few.
“Brokers entering into new arrangements that ignore the above issues do so at their own peril,” Radford adds. “Existing arrangements should be reconsidered in light of the above ASIC approach as well.”
The Senate Economics Committee is also conducting a review of the general insurance industry focusing on issues such as the increase in the cost of cover over the past decade, transparency, the concept of and independent comparison service.
The government is also finalising how industry will fund ASIC’s regulatory activities which will result in new licensing costs for the industry.
NIBA will continue to make sure the clear differences in performance between general insurance and life and investment insurance are pointed out but there must be real differences in order for it to succeed.
Want to know what other trends to look out for in 2017? Check out the December 2016/January 2017 edition of Insurance Adviser.