ICA urges more clarity for financial services professionals

Detailing its goals for the year ahead in its annual financial report, the Insurance Council of Australia (ICA) said it is advocating for “clear and transparent regulatory framework for financial services” as part of its strategy to "insure" a “stronger economy”.

Also on its agenda are the abolition of state taxes and charges on insurance, a robust cyber risk framework to help cap underinsurance, and amendments to the law to allow test cases of importance to the financial services sector and its customers to 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 ongoing advocacy for the affordability and availability of insurance is critical to ensuring these financial safeguards remain in place,” said Nick Hawkins, CEO and managing director at Insurance Australia Group.

Looking back at 2021, the CEO and executive director of the ICA, Andrew Hall, acknowledged the myriad of challenges faced by both businesses and individuals Australia wide, including the domestic resurgence of COVID-19 and five declared insurance catastrophes.

“All the while, the industry has had to adapt and respond to substantial regulatory reforms as a result of the Hayne Royal Commission recommendations,” Mr Hall said.

“All the challenges we faced however, were exceeded with considerable impact and progress from our industry and the Insurance Council.”

According to data from the ICA, in 2021 general insurers provided Australian businesses and households with 4.5 million claims to a value of $38.9 billion, which equals an average of $155.5 million in claims every working day.

ASIC extends relief on PDS requirements 

Earlier this year, the corporate regulator confirmed it had reinstated its class order regarding product disclosure statement requirements for general insurers, previously due to expire on 1 April.

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 address the practical difficulties in giving a PDS to a consumer during a phone call.

ASIC received a single submission from the ICA in response to its public consultation launched in November that supported remaking the instrument.

“The relief enables insurers to interact effectively with consumers by giving greater certainty that the quote stage of the sales process can be completed during a telephone call without a provision of a PDS until after the telephone call,” the Insurance Council said in its submission.

“Without the relief, customers would face barriers to seeking insurance quotes over the phone, which is likely to hinder consumers finding products most suited to their circumstances.”