‘Poor claims decisions’ undermining public confidence

In a speech at the ASIC Regulatory Update in Melbourne this week, Mr Kell said the findings of the royal commission so far have highlighted the importance of community expectations and standards to the financial advice industry.

“At ASIC we have seen that an approach from financial services firms based on minimal or technical compliance with the law has, at times, been allowed to override fairness and good customer outcomes,” he said.

“This can only undermine trust.”

Mr Kell gave poor claims outcomes in the life insurance space as an example of this.

“The message for the industry is that you need to ensure that your conduct, and your products, explicitly take into account issues around community expectations and fairness,” he said.

Mr Kell also said increased data collection and transparency on life insurance will help to build confidence and allow ASIC to better understand the markets it regulates and the way individual market participants are performing.

“There has not been readily available public data on life insurance claims outcomes, yet for consumers this is a key measure of the performance of their insurance product,” Mr Kell said.

“What percentage of claims are paid or denied? How does that vary across different product types? How does that vary across insurers? What trends are we seeing over time? ASIC and APRA have therefore embarked on a major project to deliver insurer level data on life claims outcomes.”