FOFA regulation needed for insurance: Greens

Following reports in Fairfax Media that NAB has sacked 31 advisers over the past five years because of “conflicts of interest, inappropriate advice, inappropriate practices or serious compliance breaches”, Mr Whish-Wilson called on the government to address the problems.

While the government needs to act immediately to address the “cultural problems” in the big banks, the next important step is to introduce “mandatory FOFA-style regulations” in the life insurance industry, he said.

Commenting further, Mr Whish-Wilson said this will address the “conflict-of-interest and risk issues ASIC have recently identified in the industry”.

Mr Whish-Wilson also highlighted the previous “tri-partisan support” on the ASIC senate inquiry for establishing a royal commission into the Commonwealth Bank, which has now reignited.

“There is now an urgency to broaden any Royal Commission into white-collar crime and cultural problems in the big end of the financial advice sector, especially around the vertically-integrated companies,” Mr Whish-Wilson said.

He pointed further to the federal government which “sought to deregulate the financial sector” and by cutting ASIC’s budget “weakened their ability to investigate fraud”.

“It is time that the government took some strong action and stood on the side of consumers and small businesses in the financial services sector,” he said.