Risk Regulatory Update

ASIC provides relief for insurers and brokers for retail insurance

The Australian Securities and Investments Commission (ASIC) has introduced a new legislative instrument offering incidental retail cover relief for insurers and brokers. The relief clarifies obligations when offering retail insurance as part of bundled business insurance contracts. The new legislative instrument 2022/716 exempts insurers and brokers from certain retail client obligations for incidental retail cover, which is retail insurance provided to a business which forms part of an otherwise wholesale insurance product. The move will prevent extra compliance costs.

Freedom Insurance to pay over $100m in remediation

Freedom Insurance is to pay so far $102 million in remediation for over 83,500 customers who were or might have been missold insurance policies across an eight-year period. Freedom’s ‘harmful sales and retention practices’ were brought to light in the direct insurance sales review in 2018, with one result being the complete ban on unsolicited cold calling phone sales of direct insurance and credit insurance.

Government announces review of ASIC industry funding model

The funding model of ASIC has been in place for five years, and is up for review by the government. Treasury will oversee the review in consultation with ASIC, the Department of Finance and the Department of the Prime Minister and Cabinet. The review will be hunting down changes that could ensure the model remains appropriate, as there has been significant regulatory change during this time.