CIA calls for more clarity for financial services professionals
Detailing its objectives for the coming year in its annual financial report, the Insurance Council of Australia (ICA) said it was advocating for a “clear and transparent regulatory framework for financial services” as part of its strategy to to “ensure” a “stronger economy”. .
Also on the agenda are the abolition of state insurance taxes and fees, a robust cyber risk framework to help limit underinsurance, and amendments to the law to allow significant test cases for the financial services industry and its customers be brought on hypothetical cases. .
“Insurance plays an important role in the Australian economy, absorbing financial shocks when damage or disaster strikes insured individuals and businesses. The ICA’s continued advocacy for the affordability and availability of insurance is essential to ensure that these financial safeguards remain in place,” said Nick Hawkins, CEO and Managing Director of Insurance Australia Group.
Looking back to 2021, ICA CEO and Executive Director Andrew Hall acknowledged the myriad challenges facing businesses and individuals across Australia, including the nationwide resurgence of COVID-19 and five declared insurance disasters.
“Throughout this time the industry has had to adapt and respond to substantial regulatory reforms following the recommendations of the Hayne Royal Commission,” Mr Hall said.
“Any challenges we have faced have however been overcome with tremendous impact and progress from our industry and the Insurance Council.”
According to ICA data, in 2021 general insurers provided Australian businesses and households with 4.5 million claims worth $38.9 billion, which equates to an average of $155.5 million dollars worth of claims every business day.
ASIC extends relief from PDS requirements
Earlier this year, the business regulator confirmed it had reinstated its class order on product reporting requirements for general insurers, which was previously due to expire on April 1.
ASIC said at the time that the new instrument, ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66, would continue to provide relief to resolve the practical difficulties of granting a PDS to a consumer during a telephone call.
ASIC received a single submission from the ICA in response to its public consultation launched in November which supported the redesign of the instrument.
“The relief allows insurers to interact effectively with consumers by providing greater certainty that the quote stage of the sales process can be completed during a phone call without providing a PDS until after the phone call,” the Insurance Board said in its brief.
“Without the relief, customers would face barriers to requesting insurance quotes over the phone, which is likely to prevent consumers from finding the most suitable products for their circumstances.”