The Australian Securities and Investments Commission (ASIC) is stepping up its focus on the insurance sector as part of its 2024-25 corporate plan, which you can view here.
One of the most pressing issues highlighted is the crackdown on "harmful" insurance products and the adequacy of claims-handling responses. ASIC's efforts will concentrate on improving consumer outcomes, particularly in the insurance domain, where it aims to ensure that products are not only designed to meet the needs of consumers but are also distributed and managed fairly.
ASIC's strategic priorities include enhancing the oversight of how insurance products are designed and distributed. This involves scrutinizing practices that may lead to consumers receiving unsuitable insurance products, which can cause significant financial harm. The regulator will also monitor and enforce compliance with internal dispute resolution processes, ensuring that consumers have access to fair and efficient mechanisms to resolve their grievances.
In addition, ASIC is committed to addressing systemic non-compliance by large financial institutions, particularly in areas that impact vulnerable consumers. The focus on insurance claims handling is part of a broader initiative to ensure that when consumers need to make a claim, the process is transparent, efficient, and fair. This includes monitoring how insurers handle claims, especially after severe weather events, where timely and effective responses are critical.
Overall, ASIC’s 2024-25 plan underscores its commitment to protecting consumers in the financial sector, with a significant emphasis on holding insurers accountable for the products they offer and the claims they manage. This proactive stance aims to build a stronger, more trustworthy financial system where consumer interests are placed at the forefront.
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