Risk Regulatory Update

APRA warns insurers and super funds on insurance

The Australian Prudential Regulation Authority (APRA) has sent a letter to life insurance companies and superannuation licensees with a warning: the viability of life insurance via super may be at risk. The letter encourages insurers and licensees to address their concerns regarding trends and practices that may lead to more premium increases for group insurance.

APRA’s letter says: “APRA’s view is that these developments, if unaddressed, are likely to result in poor member outcomes, and adversely impact the availability and sustainability of life insurance through superannuation.”

Dover Financial Advisers and founder ordered to pay $1.4m

The Australian Securities and Investments Commission (ASIC) has won a case involving Dover Financial Advisers and its founder Terry McMaster, who have been ordered to pay $1.4 million in penalties by the Federal Court. The firm was found to have contravened financial services laws over 19,000 times - the number of times the Dover Client Protection Policy was provided to a client.

McMaster has been ordered to pay $240,000 for his role since he was deemed to have made all the relevant decisions in misleading and deceiving clients relating to the Policy. ASIC argued that the policy allowed the firm to mislead clients to mistake, exclude, limit, restrict or dilute their legal rights against Dover.

In 2018 ASIC accepted an enforceable undertaking from Dover and McMaster to leave the financial services industry.